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STB approves KCS' application to control Mexrail

Kansas City Southern has taken another step toward fulfilling its NAFTA Rail goal. Yesterday, the Surface Transportation Board approved KCS' application to control The Texas Mexican Railway Co. and the U.S. portion of the International Rail Bridge in Laredo, Texas, that are wholly owned by Mexrail Inc. KCS now will obtain controlling shares of Mexrail, which were placed in an independent voting trust in August pending regulatory approval.

The decision takes effect in 30 days, at which time KCS plans to dissolve the voting trust and assume control of Mexrail.

"This approval will allow us to move forward with our effort to bring better, more competitive rail service to shippers in the NAFTA trade corridor, as well as provide better rail service in south Texas," said KCS Chairman, President and Chief Executive Officer Mike Haverty in a prepared statement.

The STB will require KCS to comply with the terms of a safety integration plan developed with the Federal Railroad Administration, provide affected employees certain labor-protection conditions, allow the board to monitor bridge operations and keep the Laredo gateway open on commercially reasonable terms. The STB also reserved the right to conduct oversight if KCS acquires control of TFM S.A. de C.V. to determine if there are any operational effects on U.S. transportation.

The STB did not impose any conditions unacceptable to KCS and rejected most of the conditions requested by competing carriers, KCS officials said.

The Class I plans to place TFM, Tex Mex, The Kansas City Southern Railway Co. and Gateway Eastern Railway Co. under the common control of NAFTA Rail, a Kansas City, Mo.-based holding company.

Contact Progressive Railroading editorial staff.

More News from 11/30/2004