"For the contracting of works and services, the most violated principle was transparency," said the General Audit of the Nation (AGN) in a report that evaluated the operation of the General Roca Line between 2011 and 2012.

When in 2007 the national government decided to terminate the concession contract with Transportes R- tritanos General Roca SA, it called the Emergency Operational Management Unit (UGOFESA), formed by TBA SA, Metrovías SA and Ferrovías SA, to do so Charge of the management of the General Roca Line.

In that framework an Emergency Operation Agreement was signed in which "it was omitted to establish a procedure to contract the works and the works". Consequently, services were agreed with a procedure that "was insufficient to guarantee publicity, concurrence, competition and transparency; Principles that are fundamental in the management of state resources."

The report, approved in February 2016, exemplifies that for what is Deferred Maintenance 180 works were carried out, with different degrees of execution for almost $ 878 million. But "in 98% of cases the operator chose the supplier by Private Price Contest."

"In three of the contracts made by UGOFESA, for $ 23 million, only companies from the related environment such as Emepa SA, Benito Roggio Transporte SA, Ecotrans SA and Expreso San Isidro SA participated" only to name a few.

In addition, within the framework of the Work Program "80% of the work was done with companies in the related environment", and the AGN concluded that "it would have been advisable to use the Public Bidding mechanism to enable other firms to participate."

Another critical point pointed out by the Audit is the "lack of a penalty regime and non-intervention in the analysis of the accounts rendered by the former Secretary of Transport that attacked the improvement, safety and development of the railway system."

According to the Emergency Operation Agreement, UGOFESA "had to contract and execute all the necessary actions to recover, maintain and operate the services" with the verification of the National Commission of Regulation of the Transportation (CNRT) and the approval of the Secretary of Transportation (ST).

From the analysis of the work contracts it appears that "it was not fulfilled" with some questions of the current regulation in the matter of contracting. What the Audit says is that, for example, "the operator determined the selection process of the contractor and awarded the works without the intervention of the ST or the CNRT." That is to say, "there was no participation of the Secretariat in the selection procedures, nor in the control of the reasonableness of prices". Under this (i) logic, "almost $ 145 million was spent" without the intervention of any enforcement authority.

Another "absence" of the former Secretary of Transport detected by the AGN is linked to the requests for collection of operating expenses presented by UGOFESA with the fundamentals in the evolution of prices and salaries, problems of commissioning and other issues. The auditors found that "even before the audited period, there is no satisfactory response from the ST, even though the requests of the Operator are submitted to an express request".

The lack of resolution of the portfolio against the requests of the operator implied that it handles the discretionary expenses. As a result, "there was a decrease in the execution of maintenance and deferred maintenance items." The maintenance of roads and infrastructure underwent a 32.6% underreporting while in the maintenance of signage and telecommunications was 60%. Its share, the maintenance of the rolling stock had an execution of over 10%.

Neither was the presence of the Secretary of Transport or the Federal Government in general at the time of "initiating the claim for damages caused by the TMR Company to the line six years after having terminated the contract." As of December 2011 "it was estimated that the total amount involved was almost $ 1,978 million."

Regarding the expenses, the Audit detected that "UGOFESA made disbursements for items that did not form part of the approved Operating Expenses" and, by way of example, it is mentioned that "as of the second half of 2011, for $ 44.3 million without being able to verify an authorization that guarantees them.

There were also cases of prices opportunely budgeted by the operator, which then, by note, were modified. Thus, "the incorporation of a step to level increased by $ 29 million a program."

As for the price comparison of the reported works versus the estimates there are "significant differences": the budgeted amount was 278 million and the executed ended up being $ 498 million.

Regarding passengers, the AGN states that "between 2008 and 2012, the lowest number of people transported was recorded, with 2011 being the lowest year in revenue." As a positive point, "from the implementation of the SUBE and new controls to prevent evasion substantially improved the collection."

Post Audit

On April 10th 2013, there were modifications since the Ministry of the Interior and Transport elaborated a new Comprehensive Agreement with UGOFESA in which, for example, "a regime of penalties applicable to non-compliance" was established. An agreement was also made with the Faculty of Economic Sciences of the University of Buenos Aires to "verify the reasonableness and correspondence in the allocation of funds transferred and the modality of contracting between October 2009 and August 2013 for Roca, San Martín and Belgrano Sur."

Finally, in February 2015, the operating agreements were rescinded so that "the State Railway Operator will take over the integral operation of the rail services of the Miter, General San Martin, General Roca and Belgrano Sur lines."