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The Surface Transportation Board (STB) has rejected FPN-USA Inc.'s exemption application to operate the Tijuana-Tecate Shortline (TTS) between San Ysidro and Division, Calif.

The short line sought to operate a 44.6-mile portion of a line — which predominantly is located in Mexico's Baja California between Tijuana and Tecate — that currently is operated by Carrizo Gorge Railway Inc.

In an Aug. 8 decision, the board rejected the exemption application because TTS is entirely located in Mexico, and therefore the transaction is not within the STB's justisdiction, and the incidental trackage rights FPN is seeking are within the United States and actually are interchange rights, which do not require advance board authority. In addition, the application contains "materially false or misleading information," such as a statement that the proposed transaction entails acquisition of rights to operate in the United States and a statement that FPN had notified the San Diego & Imperial Valley Railroad Co., San Diego Metropolitan Transit Development Board and Union Pacific Railroad about the transaction, the STB said.

FPN-USA had planned to submit a proposal to the Mexican state of Baja California to serve as operator of the state-owned line. The STB has entry jurisdiction over railroads and rail lines that serve two U.S. points, but travel through a foreign country.

Carrizo Gorge Railway has a 20-year agreement to operate the line, says Chief Operating Officer Armando Freire.