Grupo Mexico pulls out of Argentina's $3 billion Belgrano Cargas bid

Grupo Mexico will not bid for Argentina's state-run freight operator Belgrano Cargas, a company spokesperson confirmed, removing a prospective USD 3 billion modernisation commitment from President Javier Milei's flagship rail privatisation.

The Mexican conglomerate, controlled by billionaire German Larrea, had ranked among the most prominent foreign suitors for the network, which spans approximately 7,594 kilometres and links Argentina's grain-producing and mining regions to export hubs. Argentine media reported that Grupo Mexico had explored a partnership with US-based rail technology company Wabtec and had floated an investment of up to USD 3 billion to modernise the system. That figure, tied to its earlier interest, never became a confirmed commitment.

The withdrawal deals a setback to Milei's push to attract private capital into rail infrastructure that the Argentine government says has suffered decades of underinvestment.

What drove the decision?

The proposed ownership structure sat at the centre of the dispute. Buenos Aires plans to privatise Belgrano Cargas under an open-access model: private operators would manage the railway infrastructure while multiple freight companies run trains on the tracks, a design intended to encourage competition.

Grupo Mexico wanted more. In July, the company indicated it would pursue the project only if it could secure control over both the infrastructure and its operations. The government's plan to separate infrastructure management from freight services did not align with that condition, and the company stepped away.

Why the stake is large for Argentine exports

What does this change for Argentina's freight economics? Less than 5% of the country's freight moves by rail. Trucks carry the bulk of crops and minerals to ports, raising transport costs for a country that ranks among the world's top suppliers of soybeans, corn and wheat and is working to expand energy and mineral exports.

Modernising the Belgrano network forms a central plank of efforts to make those exports more competitive. The government argues that private management and competing freight operators will reverse the decline of a system long starved of investment.

Grupo Mexico's exit shows the limits of that framework for some investors. A company built on vertically integrated rail-mining operations — its transport division runs Mexico's largest freight railway — signalled clearly that it values control of both track and trains. The open-access model, by design, denies a single operator that control.

What happens next?

Milei's administration must now find bidders willing to work within the open-access structure, or reconsider elements of it, if it wants to modernise Belgrano Cargas and cut the country's dependence on road freight. No revised tender terms have been announced.

The outcome will shape more than one railway. Argentina's ability to attract capital for the network will influence how quickly agricultural and mineral cargoes can shift from highway to rail, and at what cost. For a government betting on private operators to rebuild export infrastructure, the departure of its most visible foreign contender narrows the field and sharpens the question of whether the proposed model can secure the investment it needs.