Ferrosur

Ferrosur

Ferrosur

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This article is about the Mexican rail company. For the Argentine rail company, see Ferrosur Roca.

The Ferrocarril del Sureste (reporting mark FSRR) (English: "Southeastern Railway"), commonly known by the syllabic abbreviation Ferrosur, is a railway that serves the southeastern regions of Mexico. The company was formed in 1998, following the privatization of Mexico's railways. Ferrosur won the concession to operate the southeastern railway, which includes the line between Mexico City and Mexico's busiest Gulf of Mexico/Atlantic Ocean port at Veracruz. Grupo México has owned the company since 2005. There are long-delayed plans to merge it with the company's other railway, Ferromex.

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History

Ferrosur began operation on December 18, 1998.[1] The original ownership group was the construction company Tribasa and Grupo Financiero Inbursa. Grupo Carso (like Inbursa, a Carlos Slim Helu company) bought out Tribasa in 1999.[2] Grupo México, owner of Ferromex, acquired the railroad in November 2005 in a US$309 million stock transaction.[3] The Mexican Federal Competition Commission (CFC) had rejected a proposed 2002 merger of Ferromex and Ferrosur amid opposition from Grupo Transportación Ferroviaria Mexicana (TFM).[4]

Following the November 2005 purchase of Ferrosur by Grupo México, Kansas City Southern de México (KCSM), successor to TFM, petitioned the Mexican government to block the merger of Ferrosur and Ferromex. The CFC rejected the merger in June 2006 and stated that the merger would have led to excessive concentration in the railroad industry to the detriment of consumers and competing shippers.[5] However, in March 2011, a tribunal ruled in Grupo Mexico's favor, and the merger was permitted.[6] Grupo México continues to operate the two railways independently.[7]

Government occupation of railways

In May 2023, the Mexican Armed Forces occupied a portion of 127 kilometres (79 mi) of railways in Veracruz belonging to Ferrosur so that they could be used for the Interoceanic Corridor of the Isthmus of Tehuantepec, one of the government's most important megaprojects.[8] Mexican President Andrés Manuel López Obrador said that occurred "to avoid the risk of a future privatization of the railways and as a matter of national security and public interest."[9][10][11]

The action was labeled as "unusual"[12] and was seen as an expropriation.[9][13] Secretariat of the Interior Adán Augusto López Hernández said that the action had been discussed with Grupo México, and he called it a "temporary occupation,"[14]

On late May 2023, several newspapers erroneously stated that the government of Mexico had paid Grupo Mexico 7 billion pesos for the occupation of the railway, 2.5 billion pesos lower than Groupo Mexico had wanted.[15][16] However, López Obrador stated in a morning press conference on May 24 that sought to reach an agreement with Ferrosur not involving financial compensation. He wanted an agreement by which Ferrosur would pay a fee to use the occupied railways, and the Mexican Armed Forces would pay Ferrosur to use the railways heading to the port of Veracruz, in addition to a possible extension to a concession in exchange for the railways.[17] An agreement was ultimately reached on the night of May 31 by which, as López Obrador had intended, the concession granted to Ferrosur in 1998 for the railways, which included the occupied sections, was extended by eight years and so it remains in force until 2056. Ferrosur would cover a fee corresponding to the right of way, and the state-owned Ferrocarril del Istmo de Tehuantepec company would be responsible for the costs and spendings for the railway's operation, maintenance, and optimal safety conditions of the railways and for their optimal safety conditions.[8]

Territory

Ferrosur operates the ports of Veracruz and Coatzacoalcos and SC Line between Veracruz and Mexico City. The line has numerous tunnels east of Acultzingo, including the longest ine in Mexico. Ferrosur road locomotives are often seen coated in soot because they often pass through those tunnels.

See also

Notes

  1. [1]
    Murray 2003, p. 39
  2. [2]
    Murray 2003, p. 38
  3. [3]
    FWN Select, "Grupo Mexico Buys Ferrosur Railway From Carso" (Nov. 25, 2005)
  4. [4]
    FWN Select, "Mexico's Antitrust Agency To Study Railway Merger" (November 28, 2005)
  5. [5]
    FWN Select, "Mexico's Antitrust Commission Rejects Rail Merger Appeal" (Nov. 15, 2006)
  6. [6]
    "Mexican Tribunal OKs Grupo Mexico Railroad merger". Reuters. 2011-03-28. Archived from the original on 2011-04-01.
  7. [7]
    Foran, Pat (September 2013). "Ferromex increases infrastructure investment to prepare for growth". Progressive Railroading.
  8. [8]
    De la Rosa, Alejandro (2 June 2023). "Gobierno extenderá concesión de Ferrosur a cambio de tramos ferroviarios". El Economista (in Spanish). Retrieved 18 July 2023.
  9. [9]
    "AMLO turns to national security to defend rail expropriation". BN Americas. 22 May 2023. Retrieved 25 May 2023.
  10. [10]
    "AMLO Seizes Rail Line From Mexican Billionaire Germán Larrea's Grupo Mexico". Bloomberg L.P. 20 May 2023. Retrieved 23 May 2023.
  11. [11]
    Mahalingam, Eugene. "Obrador seizes rail line from billionaire poised to buy Banamex". The Star. Retrieved 23 May 2023.
  12. [12]
    De Córdoba, José (19 May 2023). "Lopez Obrador Expropriates Stretch of Mexican Railroad". The Wall Street Journal. Retrieved 25 May 2023.
  13. [13]
    Staff, M. N. D. (22 May 2023). "Government takes over Veracruz sections of Ferrosur railway". Mexico News Daily. Retrieved 23 May 2023.
  14. [14]
    "'No estamos expropiando nada': Adán Augusto sobre 'toma' de Ferrosur" [We are not expropriating anything': Adán Augusto on the 'seizure' of Ferrosur]. El Financiero (in Spanish). 20 May 2023. Retrieved 25 May 2023.
  15. [15]
    "AMLO y Grupo México habrían llegado a un acuerdo por Ferrosur". www.yucatan.com.mx (in Spanish). 24 May 2023. Retrieved 11 June 2023.
  16. [16]
    "Acuerdan Gobierno y Grupo México pago de 7 mil mdp por vías de Ferrosur". planoinformativo.com. 24 May 2023. Retrieved 11 June 2023.
  17. [17]
    Montesinos, Carlos (24 May 2023). "AMLO niega acuerdo por 7 mil mdp con Germán Larrea, pero confirma negociaciones por Ferrosur". Reporte Índigo (in Spanish). Retrieved 18 July 2023.

References

  • Murray, Tom (November 2003). "U.S. railroading's new frontier". Trains. 63 (11): 28–41. ISSN 0041-0934.
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