- No decision on projects, but utility won’t consider water
- Argentina offered to quickly pay $405 million owed to Suez
Suez SA has held talks with Argentine President Mauricio Macri’s government about investing in the South American nation 10 years after it was kicked out, according to two people familiar with the matter.
The French water and waste utility hasn’t decided on any specific projects it will invest in, said two people familiar with the talks who asked not to be named because the matter isn’t public. The Argentine government has informed its French counterparts that it may speed up the payment of a $405 million arbitration award it owes Paris-based Suez if the company agrees to reinvest it in Argentina, one of the people said.
Suez executives will probably visit Buenos Aires in September and may make an announcement at an investment conference organized by Macri’s government, one person said. Suez isn’t interested in entering the water market after its experience under former President Nestor Kirchner, who canceled its contract for the city of Buenos Aires in 2006, one person said.
“Suez denies all information relating to a supposed project to resume concession operations in Argentina,” the company said in a statement to Bloomberg. The company didn’t provide further comment on any potential strategy in Argentina.
Macri moved swiftly since taking office in December to convince companies, including those who exited Argentina in the past decade, that the nation can be a destination for investors. The government has signed investment deals worth about $16 billion since December and plans to announce about $6 billion more before the end of the year. The government plans to spend $16 billion on water and waste projects through 2019 as part of a program to modernize infrastructure in Latin America’s second-largest economy.
An official in Macri’s government declined to comment.
In April 2015, the World Bank’s arbitration body ruled that Argentina should pay Suez $405 million in damages. Former President Nestor Kirchner revoked a Suez contract in 2006. Kirchner froze utility prices following the government’s default on $95 billion of bonds in late 2001 and a devaluation of the currency.
The government said at the time it ended the concession with Suez unit Aguas Argentinas SA because the company failed to invest enough in services for its 10 million customers. The government’s move came six months after Paris-based Suez said it would forgo its contract because it wasn’t allowed to raise rates.
Suez is 34 percent-owned by Engie, after the waste and water utility was spun off from the then-GDF Suez. That company was formed from the merger of Gaz De France, a French state-owned natural gas group, and Suez Environnement, in 2005.