Cooperation In The Hidrovia Will Make Businesses More Efficient And Profitable
The hidrovia is a 2,100-mile major commercial artery that stretches across the Parana and Paraguay rivers from Nueva Palmira, Uruguay to Caceres, Brazil through Argentina, Paraguay and Bolivia. This is the commercial route taken by agricultural produce and metals coming downstream and manufactured goods and fuel going back.
As many as 4,000 barges, tugs and container ships travel up and down the hidrovia. This route is considerably better for the environment compared to the region’s sub-standard road network. A 1,500-ton barge can easily carry the same amount of goods as 60 trucks. However, there are many challenges faced in the hidrovia because of the complicated relationships of the economies that it connects.
According to Monica Navarro, CEO of Grupo Vessel, there is really no concrete agreement regarding competitiveness. Governments have initially agreed to apply uniform regulations and costs to businesses that use the hidrovia but it was not actually practiced. Argentina has taxes and regulations to make the cost of keeping and maintaining a fleet more costly than Paraguay.
For example, in Argentina, taxes on profits are about 35% while in Paraguay, the tax rate is only 10%. According to Grupo Vessel that is registered in Paraguay, their investment was warmly welcomed in Paraguay that is why the company has repositioned itself in Paraguay. As a result of this imbalance, Argentina’s shipping industry including its ports has almost come to a standstill.
If all the countries that make use of hidrovia work together, business will become more efficient and lucrative. However, a trip downriver shows that they are getting close to cooperating for everyone’s benefit. It is very obvious that the river route is very challenging compared to taking things by land. In spite of the presence of high tech equipment on the ship’s bridge, there are cases where boats have to lower a dingy to take soundings of the river ahead.
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