KCSM could take over Mexico City-Querétaro rail link

Kansas City Southern Mexico (KCSM) could take over the passenger rail project to connect Mexico City with Querétaro state via Mexico state, even though another firm presented a bigger project to construct the line all the way to Guanajuato state.

Infrastructure, communications and transportation (SICT) minister Jorge Nuño Lara said during a press conference on Thursday that he asked the rail operator, a subsidiary of US firm Kansas City Southern (KCS), to present a proposal for the 210km link, a project that President Andrés Manuel López Obrador said his administration could resume. 

“One of the things that I asked Kansas City is to also reinforce the issue of a passenger line between Mexico [City] and Querétaro because they are the [freight] concessionaires of that line. They agreed to give us a proposal in the coming weeks,” he said. 

KCSM, one of Mexico’s two main rail concessionaires, has a network of hundreds of freight lines, but none are currently operating for passenger use. The operator received its 50-year-old concession in 1995 and, while it carries out yearly modernization and maintenance plans, not all its lines are in good condition or even existing.

The minister’s request may be a condition to greenlight the US$25bn acquisition of KCS by Canadian Pacific (CP) that was approved by the US in mid-March as it was made during a meeting Nuño held with KCS and KCSM’s top officials in January, he said. 

“We did meet with the managers. They have been developing proposals to strengthen the issue of cargo on their lines from Lázaro Cárdenas to the northern border and have a direct connection to Canada,” the minister said. 

Also in January, López Obrador said the Mexico City-Querétaro train was still on the table and that his administration would begin the planning and leave construction to his successor. Mexico will hold general elections in June next year. 

Bajío train

Last year TMSourcing submitted a unsolicited proposal to the SICT to build the 50bn-peso (US$2.7bn) Bajío rail link between the capital and León city in Guanajuato state. 

Questioned about the status of the company’s request, the minister said: “It was canceled because it did not meet the dates scheduled for the delivery of studies.”

“When [TMSourcing] delivered its expression of interest, there was a study delivery schedule, it did not meet it, so it was notified that it was no longer of interest to the ministry because it had not complied,” Nuño said. 

Last week, the firm’s CEO Adolfo González Olhovich told reporters after a press conference that TMSourcing would present a new proposal to the Mexican government for the 416km passenger rail link.

“Investors are very interested. In fact, there are a number of large funds and banks that are very interested. There is money, what is lacking is a project where interests are aligned,” he said.