Grupo Mexico will not bid for Argentina's state-run cargo rail operator Belgrano Cargas, a spokesperson said on Wednesday, dealing a setback to President Javier Milei's effort to attract private capital to overhaul one of the country's most important export arteries.

By Lucila Sigal The Mexican conglomerate, controlled by billionaire German Larrea, had emerged as one of the highest-profile foreign suitors for Belgrano Cargas, which runs freight lines linking Argentina's grain and mining regions to export hubs. Belgrano Cargas' network covers about 7,594 km (4,718 miles) The government has said the system suffered decades of underinvestment and would be privatized under an "open access" model aimed at encouraging competition, with private operators managing infrastructure while allowing multiple freight companies to use the tracks That structure appeared to be a sticking point for Grupo Mexico, with the firm saying in July it was only interested if it could secure control over both infrastructure and operations Grupo Mexico had previously signaled strong interest, including a planned partnership with US-based rail technology company Wabtec and a proposed investment of as much as $3 billion to modernize the network, according to Argentine media reports Argentina is a major global supplier of soy, corn and wheat, and is also trying to expand energy and mining exports Less than 5% of the country's freight moves by rail, forcing heavy reliance on trucks and raising the cost of moving crops and minerals to port