(Bloomberg circulated the following story by Carlos Manuel Rodriguez and Andres R. Martinez on September 19, 2009.)
NEW YORK — Grupo Mexico SAB, which operates the country’s largest rail company by track miles, said its rail unit may reach an agreement within “weeks” to resolve a 12- year dispute on right-of-way fees with the Mexican unit of Kansas City Southern, its largest rival.
“As long as nothing bad happens, there is going to be an agreement,” Ferrocaril Mexicano SA Chief Executive Officer Rogelio Velez said in an interview in Mexico City yesterday. The companies have agreed on the amount of fees to charge each other for access to 32 different rail points. They must still decide fees for rail access in Guadalajara and Monterrey, he said.
Kansas City, a unit of the U.S.’s fifth-largest rail shipping company, and the company known as Ferromex have failed to reach an agreement on track rights since the government sold its rail lines to the two companies starting in 1997. The agreement would free up millions of dollars in fees that neither company has paid since the privatization of the railways.
The two have filed complaints against each other, alleging that right-of-way fees are too costly. An agreement will reduce shipping distances and increase cargo traffic, the Communications and Transportation Ministry has said.
In Mexico, rail accounts for less than 15 percent of land freight, while trucks represent about 85 percent, putting a strain on the nation’s highways. In the U.S., trains carry more than 40 percent of freight.
Vladimir Saldana, a Kansas City Southern spokesman in Mexico City, said yesterday in a telephone interview that the two companies may reach an agreement within weeks.