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10/28/2008



Rail News: Rail Industry Trends

In Mexico, restructuring puts rail association back on track


The future of Mexico’s nascent railroad industry association was anything but certain this summer after two of the country’s three largest railroads left the group in the lurch. But the four-year-old organization is back on track this fall, boasting a broader membership base, a new name – and, perhaps, a brighter future.

“Things are looking a lot better than they did a few months ago,” says Emilio Sacristán Roy, general director of the group that now answers to the more concise Asociación Mexicana de Ferrocariles A.C. and was formerly known as Asociación Mexicana de Empresas Ferrocarrileras A.C. (AMF) “And this new name is the one we always wanted, anyway. It just coincides with the restructuring.”

The association had little choice but to restructure. In June, Ferrocarril Mexicano S.A. de C.V. (Ferromex) and Ferrosur S.A. de C.V. pulled out of the association, citing “very big differences” with Mexico's other big freight railroad, Kansas City Southern de México S.A. de C.V. (KCSM). Rivals Ferromex and KCSM have been haggling over trackage rights and other issues for the past decade.

So: Sacristán, who’s headed the association since its 2004 inception, set about finding a way to make up for the loss of two major railroads and two primary dues-payers. His suggestion to the association’s four remaining freight railroads? Divide AMF into three chapters: freight railroads, passenger railroads and rail industry suppliers, the latter of which would become voting members.

The four remaining freight roads — 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. — recently approved the plan. Now, “Chapter I” members include the four aforementioned freight roads plus one more: Carrizo Gorge Railway Inc., which is based in El Cajon, Calif., and operates Mexico’s former Tijuana-Tecate line. Also, a “Committee of Foreign Railroads” has been established; it comprises representatives from BNSF Railway Co., CSX Transportation, Canadian National Railway Co., Canadian Pacific Railway and Norfolk Southern Railway. (“Everyone except UP,” which has an ownership stake in Ferromex, Sacristán says.)

Chapter II members comprise the passenger-rail contingent, which currently is five systems strong: Ferrocarril Suburbano de la Zona Metropolitana de México, Mexico City’s commuter train, and the Mexico City, Guadalajara and Monterrey metro systems. With two more Mexico City lines about to be tendered, another Chapter II member could sign up in the not-so-distant future, Sacristán says.

Finally, Chapter III members — suppliers to Mexican railroads — now have full voting rights under the association’s new bylaws, Sacristán says, adding that the supplier membership ranks subsequently have swelled from 23 to “30 or 31” in recent weeks. He expects number to grow to about 40.

As for Ferromex and Ferrosur? The door’s always open, says Sacristán, who helped shape Mexico’s successful railroad privatization in the mid-1990s.

“It may take a while, but I’m convinced that when they sort out their issues with KCS, and things are not so stressed, they will come back,” he says.

Pat Foran


Contact Progressive Railroading editorial staff.

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