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Rail News: M&A

BNSF, NIT League conditionally support KCS' NAFTA Rail plan

In an Aug. 4 filing with Surface Transportation Board, Burlington Northern Santa Fe agreed to support Kansas City Southern's proposed NAFTA Rail plan as long as U.S.-Mexico gateways at Laredo and Brownsville, Texas, are kept open "at commercially reasonable terms."

Shippers currently can access the Laredo gateway via Union Pacific Railroad, BNSF/The Texas Mexican Railway Co. or KCS/Tex-Mex. BNSF obtained access to both gateways via trackage rights from UP as part of the Southern Pacific Railroad merger.

"The diminution of Tex-Mex as a neutral, non-controlled bridge carrier could weaken the competitive discipline that BNSF provides to UP over the Laredo gateway," BNSF officials said in the filing. "The transaction could result in a stronger interline connecting carrier with which BNSF could work to enable it to provide better competition."

KCS plans to place The Kansas City Southern Railway, Tex-Mex, Gateway Eastern Railway Co. and TFM S.A. de C.V. under the common control of NAFTA Rail, a Kansas City, Mo.-based holding company.

Meanwhile, KCS and National Industrial Transportation League reached an agreement Aug. 5 under which the shipper association will support NAFTA Rail if KCS meets "certain operating conditions" with shippers.

Contact Progressive Railroading editorial staff.

More News from 8/6/2003