Ferromex, Ferrosur pull out of AMF; association's future 'very uncertain' (6/20/2008)


The future of Mexico's 4-year-old railroad industry association looks dim.

Two of the country's three largest freight railroads — Ferrocarril Mexicano S.A. de C.V. (Ferromex) and Ferrosur S.A. de C.V. — have pulled out of the Asociación Mexicana de Empresas Ferrocarrileras A.C. (AMF), citing "very big differences" with Mexico's other big freight railroad, Kansas City Southern de México (KCSM).

The pull-out is effective today.

"They feel that they cannot belong to an association where they have very big differences with the other [large] party, especially after another recent dispute regarding trackage rights on the KCS," says AMF General Director Emilio Sacristán Roy. "As a result, the association's future is very uncertain."

Rivals Ferromex and KCSM (née TFM) have been haggling over trackage rights and a host of other competitive issues for the past 10 years.

Ferromex-Ferrosur directed inquiries to Sacristán; in an email, a KCS spokeswoman said the railroad "is not prepared to comment on this situation at this time."

For Sacristán, who has headed AMF since it was founded in 2004, rectifying the situation is Priority No. 1.

"The remaining [dues-paying] members have asked me to look at some restructuring alternatives, based on suppliers and other additional members," he says.

Sacristán's suggestion to the remaining four member railroads — KCSM, short line Linea Coahuila Durango S.A. de C.V., terminal railroad Ferrocarril y Terminal del Valle de Mexico and government-owned Ferrocarril del Istmo de Tehuantepec S.A. de C.V. — is to divide AMF into three chapters: freight railroads, passenger railroads and rail industry suppliers. Currently, AMF, which was patterned after the Association of American Railroads, includes freight roads and a non-voting supplier contingent.

"I think the departure of Ferromex and Ferrosur could be compensated for if we restructure the organization this way," he says.

Sacristán figures he could boost the supplier member total from 23 to about 40 by making suppliers full members.

"Before, we followed the AAR example that suppliers had a voice but no vote," he says. "Now, they would have a vote."

The key, though, might be convincing the potential new passenger-rail members — Ferrocarril Suburbano de la Zona Metropolitana de México, and the Mexico City, Guadalajara and Monterrey metro systems — to sign on. Sacristán plans to bounce the idea off them ASAP.

"I will know something in a couple of weeks," he says.

— Pat Foran

Source: Progressive Railroading Daily News