A CONSORTIUM of Union Pacific and two Mexican firms is likely to be sole bidder for a 50-year concession to manage and operate Mexico’s 6400 km Pacifico-Norte Railway. Jorge Silberstein, who is in charge of the FNM privatisation, said last month that no other tenders were expected by the June 19 deadline for technical and financial proposals. ’The group is very solid, very strong, and very professional,’ he noted.
Two other firms, Tribasa SA (with RailTex and ITISA of Mexico) and mining company Grupo Mexico SA, have withdrawn from the bidding. Instead Grupo Mexico has joined with UP and construction firm Empresas Ingenieros Civiles Asociados SA. UP officials said the company would take a 10% to 15% stake in the venture. UP earns more than $700m in annual revenue from shipments between the US and Mexico and dominates the market. Last year it was outbid by Kansas City Southern for control of Mexico’s Noreste railway (RG 1.97 p7).
The winner of the Pacifico-Norte will also be offered an option to buy the concession for the Chihuahua - Pacific Railway at a price to be set by the government. Following the PN sale, the government plans to auction the concession for the third of the FNM regional operations, the Sureste.
The government has appointed IXE Banco SA as financial agent for the outright sale of various FNM branches as short lines. Registrations of interest for the first three were due by May 7, and the sales are expected to proceed in parallel. They are the isolated 71 km Ferrocarril Tejuana - Tecate in the far northwest, in which Railtex has expressed interest, the 320 km Nacozaria short line in Sonora, and a 973 km route linking the states of Coahuila, Durango, Chihuahua and Zatecas. o
