Search Keywords
Financial Times Wall Street Journal Economist
News Period From   To
News: 60885    Funds: $437    Pays: $524

Go Back to
News List
|
|
This News on
Daily Paywall
  Rated 30 | Views 312
Rate it | Share it 

Rail
Dispute erupts over Mexico’s rail bill
From the Financial Times of Tue, 18 Mar 2014 11:46:26 GMT

As Mexico’s antitrust bill arrives in Congress, a dispute has erupted over a rail bill that would alter the terms of the two main railway concessions.

The lower house has passed the rail legislation, which deals with the concessions held by subsidiaries of Grupo México, the mining company, and Kansas City Southern, transport group. The bill is now before the Senate.

The companies fear their rights and the rule of law risk being eroded, while legislators complain a lack of interconnection adds hundreds of miles and costly delays to freight journeys. In addition, while tariffs have increased as much as eight times in recent years, the network has not been expanded.

However, a study by Cidac, a think-tank, argued that the issue is not black and white. Though the study agreed that some changes were overdue, it also pointed out that it would be more effective to focus on the structure of tariffs than to change the way the railways are operated.

That, it warned, “would generate a series of economic inefficiencies affecting other sectors and the national economy”.

Indeed, a report by the OECD found Mexico’s rail privatisation in 1995 had led to a doubling of traffic and “we see no evidence of misuse of railway market power”.

Mexico has no shortage of inefficiencies and has begun to tackle domestic vested interests.

However, shifting the terms partway through a concession “does not bode well” for investor sentiment as Mexico opens up its energy sector, said one former government official.

“Investors are less worried about violence and drugs trafficking than the rules changing as they go along,” he noted.

Meanwhile, the debate over the antitrust bill, which is aimed at stopping companies from achieving market dominance through illegal monopolistic practices, is raising its own concerns that it could actually lead to less, not more, competition in Mexico



This article is provided by DailyPaywall.com, which is published and distributed by Paolo Cirio Ltd., registered in England, number 8188080. Registered Office: Suite 36, 88-90 Hatton Garden, City of London, EC1 N8PG, United Kingdom. Paolo Cirio Ltd. alone is responsible and liable for information and services provided through Daily Paywall’s newspaper and website.





Earn Money
Offer Money
Buy Advertising
Buy Artwork Article

Similar Articles
Get Paid to Get Informed