Kansas City Southern disagrees with Mexican panel on freight-rail competition

Kansas City Southern officials issued a statement yesterday saying they disagree with the Mexican Economic Competition Commission's conclusion that competition is lacking in certain areas of the freight-rail market in Mexico.

KCS officials were reacting to the commission's preliminary report on effective competition in the market for interconnection services, trackage and switching rights used to provide freight-rail services in Mexico. The commission concluded that the conditions of effective competition are lacking in the market of trackage rights in the networks operated by KCS de Mexico S.A. de C.V. (KCSM),  Ferrocarril Mexicano S.A. de C.V., and Ferrocarril and Terminal del Valle de México S.A. de C.V., an entity partially owned by KCSM.

In the next 20 days, KCS will file evidence and arguments with the commission in favor of their position, company officials said.

They also noted that the commission's conclusions have no impact on KCSM's business or operations. If the commission confirms its findings, Mexico's railway regulatory agency would have the authority to consider certain remedies, including setting mandatory trackage rights on KCSM for specific commodities or routes.