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Ferromex, Ferrosur and KCSM reach rate agreement

Mexican mining firm and railway operator Grupo México S.A.B. de C.V. recently signed an agreement with Kansas City Southern de México S.A. de C.V. (KCSM) regarding interconnection and rights of way between Grupo México’s Ferrocarril Méxicano S.A. de C.V. (Ferromex) and Ferrosur S.A. de C.V., and KCSM.

The pact, which involves the cities of Guadalajara, Monterrey and Aguascalientes, settles a long-running dispute between Grupo México and KCSM owner Kansas City Southern (KCS). The agreement sets rates the companies must pay each other for interconnection and rights of way on each other's lines and at terminals.

In addition, KCSM signed an agreement with Ferrosur that increases KCSM’s access in the central states of Puebla and Tlaxcala, and to the port of Veracruz. KCS agreed to withdraw its objections to the merger of Ferrosur into Grupo México's transport and infrastructure division, which includes Ferromex.

KCS’ objections led to a probe by Mexico’s antitrust commission, which ruled against the proposed merger in 2005 and levied fines against Ferromex, Ferrosur and owner Grupo México.

The agreement will increase the efficiency and competitiveness of Mexico’s railways, and enable the merger to be resolved, according to Grupo México.

Contact Progressive Railroading editorial staff.

More News from 2/12/2010