The Government of Andrés Manuel López Obrador will close its last mile on rails. In less than 10 days, the president will issue a decree so that around 20,000 kilometers of railways, which at this moment only transport tons of cargo, can also be used to transport passengers. In line with the construction of his emblematic work, the Mayan Train, in the southeast of the country, the president declared this week that one of the axes of his transportation policy lies in the resurgence of passenger cars. “It is not expropriation. It is in the Constitution and in the law, it is nothing more than making use of the right that we have to use all that infrastructure for the benefit of the people of Mexico,” he declared.
In Mexico, passenger railways were suspended in the mid-1990s during Ernesto Zedillo’s PRI administration. During that Administration, the railway service was dedicated only to the transportation of goods and was concessioned to private companies for periods of between 20 and 50 years. Some of the most relevant concessionaires in the territory are those of Grupo México owned by magnate Germán Larrea through his Transportation division; Railway and Terminal of the Valley of Mexico; Kansas City Southern from Mexico; Coahuila-Durango Line, among others.
López Obrador reported that his Government has already sent letters to the freight railway companies that have concessions to offer them a preferential option in the project, and explained that he hopes to have a response by next January. If the current concessionaires are not interested in entering the passenger business, a third party or even the State could enter: “We are then going to make the decision that the Mexican State starts a program for the acquisition of passenger trains and uses the same tracks so that the train service to Mexico returns,” indicated the president in his usual morning conference.
With the next publication of the decree in days, the concessionaires have closed ranks so as not to publicly express their opinions on the controversial decree. However, behind closed doors, voices from the sector are already analyzing the viability of this new market segment, especially in those areas of the country where it does make sense to open a passenger train, for example, Mexico City with Querétaro, Guadalajara, Monterrey, and even Puebla and Veracruz.
After more than 25 years without a passenger train system in operation, the resurgence of these cars in Mexico represents a budgetary, operational and safety challenge. Analysts of the railway sector warn that in no country in the world is passenger transport profitable, which would lead to the State subsidizing the cost of travel. In addition, a surgeon’s synchronization will be required to make the transfer of millions of tons of goods and passengers on the same road viable.
In the country, passenger trains have their best example in the suburban trains that run in Mexico City and the State of Mexico, in Guadalajara and in Monterrey. There are passenger trains intended exclusively for tourism such as El Chepe, the Tequila Express, the Puebla-Cholula, and now the Mayan Train, which is about to open. According to figures from the Rail Transport Regulatory Agency, from January to September almost 34 million people traveled by train, mostly through the Suburban Train of the Valley of Mexico. In that same period, more than 53 million tons of cargo were moved by rail.
The efforts of this Government to make the train whistle reach the most remote territories such as the southeast of the country or the isthmus of Tehuantepec has not avoided clashes with private companies. Last May, Navy agents took over a 128-kilometer railway section controlled by Grupo México in Veracruz, a controversial measure that was later resolved in an economic agreement between both parties, without ignoring the handful of lawsuits by environmentalists that it has faced. the Mayan Train during its construction.
Carlos Barreda, representative in Mexico of Stella-Jones, points out that the main challenge of this reconversion will be the construction of new tracks for high-speed trains that will allow offering an alternative to the options that currently exist, such as buses that travel a much broader network than the railway, and low-cost airlines. “It is very difficult to make an estimate for now, since the orography through which the 20,000 kilometers of track of the railway system run is very complex. However, to have an idea of the cost that the project could have using the Mayan Train as a reference, it could be calculated that each kilometer would cost 20 million dollars,” he mentions.
The businessman adds that the operation of the freight rail service requires great specialization, and this is very different from that of the transportation of people. “Two months is not a reasonable period to make a business decision of such magnitude, since studies would necessarily have to be carried out on the demand for the service throughout the territory of the Republic, its financial viability and a countless number of prior analyzes that any company or government in the world would require doing”, ditch.
Benjamín Alemán, former director of the Rail Transport Regulatory Agency (ARTF), also points out that at this time when Mexico is getting ready to take advantage of the nearshoring, Northbound freight cars will be strategic and introducing passenger service in the future may be an obstacle. “The railway moves between 20% and 25% of the cargo that moves in the country, it is an even smaller proportion, but it is expected to increase its market share,” he warns.
For the railway specialist, another point to be addressed is security both on the tracks and in the terminals to avoid theft and acts of vandalism that have already affected cargo convoys. According to official figures, from January to June 2023, 1,087 cargo thefts were reported, 20% more compared to the same period in 2022, while 5,741 reports were received in the area of vandalism.
Jaime Paredes Camacho, professor at UNAM, points out that the presidential proposal is feasible, but the fine points of the initiative must be established: the strategy plan coordinated with the concessionaires, the security project and the amounts in terms of state investment, private investment and subsidies. “Yes, it can be a mixed movement as long as investment grows in the technical safety of the roads, in terms of all the energy infrastructure requirements and, on the other hand, taking care not to affect the current cargo supply chains that They move by rail, because if they are affected it will affect those of us who buy the products in the supermarket,” he warns.
The expert says that in addition to the electrification of the tracks, an outlay is required on the modernization of the railway stations. “Quality standards for passengers imply other specifications and a much higher investment. I think it is a very good initiative, but it does need to be supported by supply and demand and to be able to say how much the State would have to pay, how much the investment will be, how much the subsidy would be in the event that the State had to give it,” he concludes.
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