Argentina seeks to sustain public works hit by scandal

Argentina's government is seeking to shield new and ongoing public works projects from a widening corruption scandal that has engulfed many of the country's largest companies.

President Mauricio Macri's administration created a trust of as much as $300mn to help public-private partnerships receive the financing they need to complete projects.

"We are committed to maintain the work and move forward with infrastructure projects, in roads as well as airports, railways and public transport," transport minister Guillermo Dietrich said.

After taking office in December 2015, the Macri government spearheaded an ambitious campaign to renew crumbling infrastructure.

Dietrich highlighted that it was important to separate the companies from executives who have admitted—either publicly or in court—to having paid bribes.

"Many of these companies include thousands of people who work and have nothing to do with any of this," he said on 27 August.

In recent weeks, much of Argentina's business elite has found itself ensnared in the scandal thanks to the meticulous notes of a driver for a high-ranking official in the former planning ministry.

The driver, Oscar Centeno, kept notebooks detailing alleged bags of cash that were picked up from contractors and delivered to government officials during the administrations of the late former president Nestor Kirchner and his wife and successor Cristina Fernandez de Kirchner, who ruled Argentina from 2003 to 2015.

The case has already led to at least 26 arrests, 11 of whom have been released, while at least 17, including at least two former government officials, have tried to reach plea deals with the prosecution.

The trust that the government set up will effectively work as an intermediary between the financial sector and construction companies to assure the firms will be able to obtain the financing needed to keep the projects from derailing.

As the corruption scandal has unfolded many have grown concerned that financing for construction projects would come to a halt, affecting one of the few bright spots in an economy that appears to be in the throes of another recession.

"Rising perceptions of corruption may weigh on the ability of domestic firms to obtain financing needed to advance projects as investors and financiers choose to wait for the scandal's consequences to become clearer," wrote the Fitch Group in a recent note.

The sweeping nature of the scandal has led to comparisons with Brazil's Car Wash investigation. Argentinian government officials say the local probe largely affects the previous administration and not the one currently in power.