AMLO threatens to revoke train concessions on passenger dispute

Mexico’s government could revoke train concessions from companies that do not agree with its plans to establish passenger lines on existing freight routes, President Andres Manuel Lopez Obrador said Tuesday.

The government has requested that companies with train line concessions across Mexico consider operating passenger routes, saying that if they don’t it will provide the service itself or give away the rights to other firms.

During his morning news conference, AMLO — as the president is known — said his administration would seek to broker deals with the firms that currently hold concessions by November, but would consider alternatives if agreements can’t be reached.

“What we’re looking to do is apply a clause that is in the concessions. According to this clause, the Mexican state, which represents public interests, can use the train routes for passenger trains in the whole country,” AMLO said. “It’s important for us to put it into practice, but we have to talk to those who have the concessions first.”  

“If for some reason they don’t accept, the state would be allowed to carry out the service directly or give the concession to other companies,” he said.

Nearing the end of his term, AMLO is rushing to complete ambitious infrastructure projects and rework some public contracts. Earlier this month, his administration overhauled the terms of airport operators’ agreements, a change that caused stocks to tumble and generated concerns of government overreach.

The next administration will have to decide how to make the rail plans profitable. Potential options, AMLO said, include the investment of additional funds into train line improvements and the electrification of routes. 

The government cited GMexico Transportes SAB de CV as a company with experience operating a tourist train known as “El Chepe.” The move to create new passenger routes comes as the government looks to finish the touristic Tren Maya train, which it has sought to inaugurate by December even as parts of the route and stations remain unfinished.