Decree 1299/2012: Approve the agreement made between the National State by the Minister of the Interior and Transport and the Potasio Río Colorado company limited [Mineral Railway between Malargüe and Chichinales]
Agreements Decree 1299 /2012
Approve the agreement made between the National Government by the Minister of the Interior and Transport and Potasio Río Colorado company limited.
Buenos Aires 27/7/2012
In view of the Decree No 2019 of 25 November 2008, the laws Nos 2873 and 26,352 and their amendments, and considering:
That by Decree No 2019 of 25 November 2008, the undertaking called the Potasio Río Colorado Project, to be developed by Potasio Río Colorado company limited, for the extraction of potassium chlorate, which is located in the extreme south of the municipal area of Malargüe, in the province of Mendoza, was declared to be of national interest.
That the Project represents a total investment of approximately twenty nine thousand five hundred million pesos ($29,500,000,000) and involves the construction of an important work of railway infrastructure, as well as the construction of new high voltage transmission lines, a port terminal, their own thermal-electric power generating plant, their own self sufficient dwelling accommodation with three thousand six hundred (3,600) beds, and production contemplated of up to a maximum of four million three hundred thousand metric tons (4,300,000 tonnes), constituting the most important centre of production of potassium chlorate in the world.
That it is the policy of the National Government to promote regional integration, and the strengthening of local economies, through help for investment projects, which tend to promote the betterment of the general condition of its inhabitants.
That the Potasio Río Colorado project, as well as representing an investment of great magnitude, brings a genuine source of work, as well as the creation of new communicational infrastructure for the country.
That to make possible the transport of potasium chlorate for its commercialization, Potasio Río Colorado company limited will bring to fruition an investment of railway infrastructure works amounting to approximately 350 km, which runs from Chichinales, province of Río Negro, to the neighbourhood of Rincón de los Sauces, province of the Neuquén, whose magnitude is without precedent in our country.
That the National Government has reached an agreement with Potasio Río Colorado company limited greatly beneficial for the general interest, which is consistent with the legitimate right of Potasio Río Colorado company limited to run first and foremost the project of the railway branch line of the New Line to be constructed, and has agreed that the said infrastructure may be used by other operators and the same, once the mineral extraction has ceased by Potasio Río Colorado company limited, will be transferred gratis to the National Government in order to be incorporated into the national railway network.
That the Constructional and Operating Model designed by Potasio Río Colorado company limited for the new extent of the branch line of the New Line was approved by resolution of the National Commission for Regulation of Transport Number 1277 of 7 June 2011.
That, in order to effect the construction, the title and operation of the railway infrastructure to be constructed, as well as the conditions of use and the obligations arising during the phase of operation and maintenance, an Act of Agreement was signed between the National Government, Ministry of the Interior and Transport and the undertaking Potasio Río Colorado limited company on 19 July 2012.
That, given the magnitude of the project, and the importance of the transport of potassium chlorate to the province of Neuquén and to the province of Río Negro, the governors of these provinces have signed the Act of Agreement as proof of their agreement.
That the General Management of Legal Matters of the Ministry of the Interior and Transport have undertaken the role for which it is responsible.
That the present measures are announced by virtue of the powers conferred by Article 99, sub-sections 1 and 2 of the National Constitution.
By it the President of the Argentine Nation decrees:
Article 1 – Approve the Act of Agreement between the National Government – Ministry of the Interior and Transport on the one part, and the undertaking Potasio Río Colorado company limited, which as Annex I forms an integral part of the present decree.
Article 2 – Empower the Minister of the Interior and Transport to specify the administrative acts which are pertinent to the implementation of that established in the Act of Agreement, which is approved by the preceding article.
Article 3 – May it be communicated, publicised, given to the National Management of the Official Register and archived.
— FERNANDEZ DE KIRCHNER. — Juan M. Abal Medina. — Aníbal F. Randazzo.
Act of Agreement
In the City of Buenos Aires on the nineteenth day of the month of July of the year 2012, are present, on the one part, the National Government – Ministry of Interior and Transport (the “National Government” and the “Ministry” respectively), represented by the Minister of the Interior and Transport CPN Aníbal Florencio RANDAZZO residing at 25 de Mayo 101/145 in the Autonomous City of Buenos Aires and on the other the undertaking Potasio Río Colorado company limited (“PRC”) represented by Ingeniero Sergio LEITE and Ingeniero Antonio Francisco CISNE PESSOA both with sufficient authority, residing at Olga Cossetini 731, 1st floor, in the Autonomous City of Buenos Aires, called together the “Parties”, who express having reached an agreement in the following terms:
That PRC is the proprietor of the Potasio Río Colorado Project (the “Project”), an industrial mining undertaking for the development of a mine of potassium chlorate fertilizer located in the south of the province of Mendoza, which will have an estimated useful life of fifty years, which is enshrined under the prescriptions of the National Law of Mineral Investment No 24,196, and has been declared to be of national interest by the National Executive Power (Decree 2019 of 25 November 2008) and of municipal interest by the municipalities of Malargüe, province of Mendoza (Resolution 28/2007) and of Rincón de los Sauces, province of Neuquén (Declaration 190/2007) of the respective Councils.
That, as a consequence of a series of meetings held between the Secretariat of Transport of the Nation, and directors and representatives of PRC, and in accordance with the contents of the note ST No 165, issued on 27 June 2012 by the National Secretary of Transport, the parties agree the conditions within which are dealt with the construction, future operation and maintenance of the New Line, the railway infrastructure of length approximately 350 kilometres, which runs from Chichinales, province of Río Negro, to the neighbourhood of Rincón de los Sauces, province of the Neuquén (the New Line).
That the size of the investment, and of the railway work, which will be carried out by PRC are without precedent in our country.
That in the context indicated, the National Government have reached an agreement with PRC very beneficial to the public interest, that it is consistent with the legitimate right of PRC to exploit first and foremost for profit the New Line Project; it is agreed that the infrastructure to be constructed shall be available to be utilized by other operators, and the same once the mining by PRC has ceased, shall be transferred gratis to the National Government, or to the Administration of Railway Infrastructure State Society, or to the entity which in future may replace it, in order for it to be incorporated into the national railway network, all that subject to the strict terms and conditions which arise from the present Act of Agreement.
That the Construction and Operation Model prepared by PRC for the New Line was very appropriately presented by the undertaking, and approved by Resolution CNRT Number 1277 of 7 June 2011. That, in its turn, in the present Act of Agreement, the obligations which will apply to PRC during the operational and maintenance phase of the New Line, as also the fiscal competence of the National Commission for the Regulation of Transport (CNRT), are all subject to the strict application of the applicable norms that have been established with precision.
That the organizational organs of PRC have issued the organizational acts relevant to authorise PRC to sign this present Act of Agreement and assume, in full, all the obligations which arise there from.
That a ccording to what is herein, there are no obstacles whereby PRC may not start the construction works of the New Line in strict conformity to the applicable standards, and are also authorised very appropriately to run on the New Line, a measure which will be partly constructed and commissioned by CNRT, the trains which PRC, or other undertaking of the Grupo Vale, shall carry railway material and other supplies required for the execution of the works necessary for the construction of the New Line.
That finally, in regards to the natural world, and the relevance of that agreed in the present document, it has been convenient to invite the province of the Neuquén and the province of Río Negro, in the persons of their respective governors, to sign the present Act of Agreement in proof of their consent.
I. CONSTRUCTION OF RAILWAY INFRASTRUCTURE
PRC will construct, at their own exclusive expense and responsibility, the projected fixed railway infrastructure of the New Line (the “Railway Infrastructure”) of a length of about 350 kilometres, which runs from Chichinales in the province of Río Negro to the vicinity of Rincón de los Sauces, in the province of the Neuquén (the Route). In Annex I, the map of the Route is attached.
The signing of this document is the authorization for the construction referred to in the preceding paragraph, which may start, all in accordance with the relevant standards, and in conformity with the Constructional and Operating Model designed by Potasio Río Colorado company limited for the New Line, approved by resolution of CNRT No 1277 of 7 June 2011, and the commitment of the National Minister of the Interior and Transport for the promulgation of the administrative acts which become necessary for the authorization and commissioning of the New Line.
II. TITLE AND OPERATION OF THE RAILWAY INFRASTRUCTURE. IN FORCE UNTIL THE CESSATION OF RAILWAY OPERATIONS
PRC , as a mark of their operation, primarily as a mineral operation, will be the sole proprietor of the railway infrastructure, and shall operate it to transport the production of potassium chlorate from the mine under their ownership, in the department of Malargüe in the province of Mendoza, as well as all the supplies and other goods which are necessary for the said working.
The ownership of the railway infrastructure by PRC shall be extinguished at a date of which the PRC shall give to the Minister with eighteen (18) months advance notice, or else on 31 December 2064, whichever occurs first (Cessation of Railway Working).
III. CONSTITUTION OF MINERAL SERVITUDE
Taking in to account the purpose to which the New Line shall be put, PRC shall secure the relevant mining servitudes on the assets affected by the Route, which are authorised by articles 146, following and in agreement with the National Mineral Code.
It is recorded that, at that date, the competent mineral authorities of the provinces of the Neuquén and Río Negro, by virtue of Resolutions 86/2010 and 6/2012 respectively have conceded to PRC the right of mineral servitude for the transport of potassium chlorate.
IV. CONSTITUTION OF PERPETUAL SERVITUDES IN RESPECT OF TRANSIT
As an addition to the remaining obligations assumed in the present document, PRC shall procure, in accordance with the constitution, perpetual servitudes of transit over third party owners of assets affected by the Route in the terms of articles 2970 and in accordance with the Civil Code in addition to the mineral servitudes mentioned in point III above, and in favour of the assets included in the New Line, which result from the ownership by PRC (the “Dominant Proprietor”).
PRC shall not have an obligation to obtain all the perpetual servitudes for transit immediately, nor contiguous ones one following another, since until the Cessation of Railway Operation, the New Line may be built and operated under the protection of the rights conferred by the mineral servitude.
V. TRANSFERENCE OF OWNERSHIP OF THE RAILWAY INFRASTRUCTURE, OF THE DOMINANT PROPRIETOR AND OF OTHER RIGHTS
When the Cessation of Railway Operations takes place, PRC shall transfer gratis to the National Government, or to the Administration of Railway Infrastructures Society of State, or to the body which may replace it in the future, with the aim of its being incorporated into the national railways network:
a) The ownership of the whole of the Railway Infrastructure constructed in the New Line, in the state in which it is found at any time, and which may never be less than the state of maintenance required by the railway standards applicable at the moment of transfer or Cessation of the Railway Working.
b) The ownership of the Dominant Proprietor, and consequently of the perpetual servitudes of transit, which were established at the said opportunity are for the benefit of the Dominant Proprietor.
c) Whatever other right s which PRC has obtained in respect of the tenants of land over whose assets the Railway Infrastructure is located, as much as such rights relate directly to the operation and / or working of the Railway Infrastructure and / or the New Line, and are consequently transferable according to the standards applicable at the time of the Cessation of Railway Operation.
Eighteen (18) months prior to the Cessation of Railway Working taking place, PRC and the Ministry shall start rounds of meetings in order to agree the forms, procedures, methodologies, time scales, and other conditions in which the required transfers shall take place, to which effect PRC binds itself, in a way that cannot be declined, to sign the documentation which may be necessary to effect such transference.
VI. COMPULSORY PURCHASE IN THE PUBLIC GOOD. PAYMENT OF COMPENSATION
I n the case that, when the Cessation of Railway Working arises, and with the objective of incorporating it into the national railway network, the National Government, or in its case the respective Provincial Governments acting by delegation of that authority, by means of an organ or body which is, in either event, competent, shall declare to be of public utility, in the terms of the regime of compulsory purchase applicable to all or some of the assets affected by the Route, which have not been the object of the constitution of a perpetual servitude of transit, PRC shall assume the corresponding obligation to pay the compensation for compulsory purchase subject to strict compliance with the following conditions:a) That the declaration of public utility shall not affect the normal operation of the New Line on the part of PRC in the terms and conditions under which it was operating up to that point.
b) That the taking of possession of the assets, which are the subject of the declaration of public utility by the part of the subject compulsorily purchased, shall have effect only once the Cessation of the Railway Working is effected.
c) That PRC is granted the right of control of the valuations and price-fixing, which may be necessary to realize administratively or judicially, and specifically those effected by the National Price-fixing Tribunal and / or by the body or organ which carries out such functions.
d) That in the case of PRC mediating such valuations and price-fixing, the same shall be considered through the subject of compulsory purchase and dealt with jointly with the PRC before adopting whatever decision for protection of the same.
e) That the compensations to be paid by PRC are limited to those that, with the limitations which in this and in the following sections are indicated, only claims relating exclusively to compensation for the objective value determined by the National Price-fixing Tribunal and / or by the body or organ which may replace it in the exercise of such functions, for the strip of the assets affected by the Route, which were not the object of grant of perpetual servitudes of transit, and through which the New Line passes, and which are not owned by third parties with more than corresponding to 50 metres on each side of the same and the damages which properly accredited are a direct and immediate consequence of the compulsory purchase of the strip.
f) In no case, PRC shall pay any compensation which: (i) compensates for the compulsory purchase of an area greater than that indicated in section e) before, nor a sum in the form of severance payment, nor which implies compensating hypothetical gains, circumstances of a personal nature, affected values, nor the greatest value which could be attributed to the asset, which is the subject of the compulsory purchase, its incorporation in to the National Railways Network, or (ii) compensates investments of whatever type, contracts or rights secured, authorised or constituted by the subject of compulsory purchase with a date later than the signing of this present document.
g) The mechanisms and procedures of payment of the sums due by PRC shall be the subject of agreement in each case with the National Government.
h) All sums which ha ve to be paid in excess of the conditions, guide lines, limitations and headings indicated in whichever of the prior sections, shall be paid by the account and responsibility of the National Government, and / or of the body which acts in the matter of compulsory purchase by delegation of those who shall indemnify PRC, for whatever disbursement may be made by PRC, and for whatever damages which PRC may experience in either case, as a consequence of any administrative or judicial order, which obliges it to pay sums which exceed the limitations and compensate amounts not assumed in the terms indicated in the previous sections or else that were imposed on PRC in contravention to whichever of the conditions mentioned in the previous sections.
VII. OBLIGATIONS ON PRC DURING THE OPERATION AND MAINTENANCE PHASE OF THE NEW LENGTH.
During the operation and maintenance phase of the New Line and until the Cessation of the Railway Working is reached, PRC undertake to: a) Comply strictly with (i) the national, provincial and municipal standards applicable, including those of a technical nature, for railway transport, which PRC carry out, as well as for other traffic, which in conformity with this present document, are lend in the New Line; and (ii) constructional and operational Model designed by PRC for the New Line, and which was appropriately approved by Resolution CNRT number 1277 of 7 June 2011.
b) Submit to the periodic supervision, the conditions of security, quality and operation of the Railway Infrastructure, rolling stock, working places, sheds, marshalling yards, and other railway installations of PRC, located in the New Line, which staff of the National Commission for the Regulation of Transport (CNRT) carry out, or by the body, or organ which may replace it in the future, as well as in respect of the compliance to the applicable remaining standards, and of the compromises assumed by PRC under the present document.
c) Always maintain the Railway Infrastructure in good condition, so that it may be traversed by the PRC trains, and by those other subjects which, in accordance with the conditions of the present document, have the right to traverse the New Line.
d) Undertake the necessary works in the railway crossings of watercourses in accordance with the standards specified by the competent authority, and to construct the culverts and necessary works for leaving the drainage of the adjoining lands free.
e) To permit the use of the New Line, always provided that it does not affect the working of the New Line in charge of PRC on the part of: (i) providers of railway services, properly authorised by the competent authority, to effect the transport of passengers without payment, having in this case to comply with the conditions of programming of PRC with prior authorization of CNRT, or the organ which may replace it in the future; (ii) properly, subject to the authorization to effect extraordinary, social and / or health transport and / or, in cases of home unrest or foreign invasion, properly declared by a competent authority; (iii) other mining concessionaires, in strict compliance the standards of the National Mining Code, and concurrent documents.
f) In all that is not expressly established, PRC undertakes to comply totally with the standards applicable to the subject of infrastructure and operation of services to be provided by PRC, or by another undertaking of the Vale Group, or contracted by them, in all the areas covered by the present document, with which the operation of the said service may be considered to be a public service. It is recorded that the present document regulates definitively the use and ultimate purpose of the New Line.
VIII. CONTROL AUTHORITY. AUTHORIZATION OF RAILWAY TRANSITS A MEDIDA THAT THE NEW LENGTH IS BUILT.
Holding in consideration of the interjuristicional nature of the New Line, the National Government activated through the National Commission for the Regulation of Transport (CNRT), or of the body which in future may replace it, will exercise control of the transits which may be made on the New Line, as well as of complying with the conditions which make up the present Act of Agreement, as well as the applicable remaining standards.
While the railway branch line is interjurisdicional, whether it is partially constructed and commissioned by the CNRT, the trains of PRC, or other undertaking of the Vale Group, or contracted by them, which transport railway material and other stores are authorised to traverse the New Line as required for the execution of the works.
IX. CONSTITUTION OF DOMICILES. JURISDICTION
The Parties give effect to the present Act of Agreement as indicated in the heading, and agree to submit all disputes, which may arise as a consequence of the interpretation, execution and termination of the present Act of Agreement, to the exclusive jurisdiction of the Tribunes in the Federal Disputes Administration, whose seat in in the Autonomous City of Buenos Aires.
X. INTERVENTION OF THE PROVINCES OF THE NEUQUEN AND RIO NEGRO
In attention to nature and the relevance of that agreed in the present document, the Parties invite the province of the Neuquén in the person of their governor Dr. Jorge A. SAPAG and of the province of Río Negro in the person of their governor, Albert WERETILNECK to signify their agreement to the present Act of Agreement, and sign to that end, receiving a copy to the same effect.
In proof of conformity, four copies are signed in the same tenor, and to one effect, in the place and at the date indicated in the docket to this present document.
BY THE NATIONAL MINISTRY OF THE INTERIOR AND TRANSPORT
ANNEX I: MAP OF THE ROUTE
The BAGSR's route to Neuquén