Privatization of Mexican railroads: Fifteen years later

In 1995, the Mexican Congress passed legislation to modify the Constitution allowing the privatization of the Mexican railroad system (Ferrocarriles Nacionales de Mexico [FNM]) as concessions. The system was divided into three main lines and several short lines that were auctioned off as a 50-year concession for the right to operate and maintain specific lines. This paper analyzes the process under which FNM was dissolved that led to the rail system privatization in Mexico, describing the federal government's effort preparing the legal and institutional framework leading to the process. The paper analyzes market gains since privatization and productivity of the private concessionaires. Practicing managers involved in freight transportation policy development could learn from the experience of the Mexican rail privatization process, identifying positive elements such as the preparation of the legal and institutional framework, creating a liability-free environment, and allowing the concessionaires the freedom to establish rates based on market conditions that encouraged private investors to participate in the concession of the main trunk lines, as well as issues that were not resolved in the original process, such as the trackage right agreement among rail concessionaires and the operation of the Chiapas-Mayab short line.

Language

  • English

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Filing Info

  • Accession Number: 01500573
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Oct 29 2013 3:32PM