Updating Mexico’s rail infrastructure
2/13/2021 Regulator describes railroads’ 2021 capex plans
By Julie Sneider, Senior Associate Editor
Mexican railroads plan to invest $458.8 million in capital expenditure projects in 2021, the head of Mexico’s rail regulatory agency told rail industry members during a Feb. 9 webinar.
Alejandro Alvarez-Reyes, a second-generation railroader who heads the Rail Transportation Regulatory Agency (ARTF) of Mexico, gave attendees an overview of the Mexican rail sector. The webinar was hosted by the Railway Engineering-Maintenance Suppliers Association (REMSA) and Andrew Stahl Executive Recruiting.
Since 1995, when the nation’s rail industry went through a restructuring from a national government-owned railroad system to a long-term concession model, private railroads have invested almost $10 billion in Mexico’s rail infrastructure, Alvarez-Reyes said.
“First and foremost that [investment] has resulted in a major improvement in safety,” he said. “How did [the railroads] achieve this? By an almost complete upgrading of the network, new locomotives technology, productivity and, of course, a new management culture. It’s really a successful story, but we want to keep improving.”
Mexican railroads’ 2021 capex plans include a $358.3 million investment by GrupoMexico Transportes, which operates Ferromex and Ferrosur in Mexico; and Florida East Coast Railway and Texas Pacifico Transportation Ltd. in the United States, Alvarez-Reyes said.
GrupoMexico is planning to spend $260.7 million on maintenance, including new ties, a locomotive overhaul, surfacing, track equipment and bridges; $69.6 million on growth projects, including investments in intermodal and refined products terminals, the Celaya and Monterrey bypasses, and rehabilitation of the Chihuahua-Ojinaga Corridor; and $28 million on “efficiency” projects, including the construction and reconfiguration of yards, construction/extension of sidings, LNG locomotive conversions, a transportation management system and a Trip Optimizer system.
GrupoMexico is investing “in a lot of maintenance, but they also are pushing the envelope to gain intermodal share from trucks and that’s why they are investing in new terminals,” Alvarez-Reyes said.
Other 2021 capex plans include $118 million by Kansas City Southern de Mexico, including for maintenance, ties and rail, he said. KCSM, which completed construction of a new rail link to Port Veracruz last year, plans to begin construction on its new international rail bridge in Laredo, Texas, he added.
Meanwhile, Ferrovalle plans to spend $9.6 million on capital projects in 2021, which includes $8.5 million on infrastructure, $600,000 on information technology and $520,000 on equipment.
