KCS challenges Mexican panel's rail competition report

Kansas City Southern de Mexico (KCSM) yesterday filed a formal response to challenge the Mexican Federal Competition Commission's report on effective competition in Mexico's freight railroad system.

KCSM filed its arguments and evidence to challenge the March 15 preliminary report in which the commission's investigative authority found a lack of effective competition regarding interconnection services for trackage rights for the KCSM, Ferromex, Ferrosur and Ferrovalle railroads, according to a KCSM press release.

The report has no legal or regulatory implications for KCSM's concession title rights or railroad operations. However, the competition panel's investigation was based on "faulty economic analysis," KCSM officials believe.

KCSM cited three reports issued by the Organization for Economic Cooperation and Development (OECD) that railroad officials believe contain important conclusions and findings that should have been considered by the commission's investigative authority.

The three OECD reports cited are "Peer Review of Railway Freight Development in Mexico," issued in 2014; “Establishing Mexico's Regulatory Agency for Rail Transport," issued in 2016; and “Review of the Regulation of Freight Transport in Mexico," issued in 2017.

The competition panel has 110 business days to analyze the arguments submitted in response to the preliminary report and issue a final report.

KCSM parent Kansas City Southern officials said they believe KCSM's response to the commission's report "is compelling and should lead to an amended final report."