KC Southern responds to Mexican COFECE report
Written by Andrew Corselli
Kansas City Southern confirmed on March 21 that the Investigation Authority of the Mexican Federal Competition Commission (COFECE) published an excerpt of its preliminary report about its assessment of effective competition in the market of freight railway transportation services “regarding certain chemical and petrochemical products shipped in certain specific routes with an origin or destination in the southern region of the State of Veracruz.”
The scope of the report is limited to 31 routes with specific points of origin and destination in the Veracruz market, and each route is tied to a specific product. Kansas City Southern de México (KCSM) is strictly involved in rendering freight transportation services in limited portions of seven of those routes. In 2018, KCS’s revenue linked to these routes represented less than $3 million.
The report “has no impact on KCSM’s current business, operations or rights under the concession, and the company plans to file a brief challenge to the report and offer evidence to support the objection,” KCS said. COFECE “must issue a final report by mid-October, which takes into account the report and arguments, challenges and evidence rendered by KCSM and other parties within the scope of the report.
“If the COFECE panel confirms a lack of effective competition in any of the routes included in the report, then the Railway Regulatory Agency would initiate the specific procedure arising from the railway regulatory law that could include imposition of remedies in the form of mandatory trackage rights on KCSM and other concessionaries, for specific products, routes or segments thereof, in addition to the mandatory trackage rights already provided in their corresponding concession titles,” KCS noted. “The agency may also impose the service conditions and rates for these mandatory trackage rights.”
Before any such action, however, COFECE must first evaluate the evidence and arguments offered.
Should the final report prove damning, “KCSM will exercise all of its rights under its concession and the law to ensure that any actions considered by the Agency are workable and consistent with KCSM’s rights under law and under its concession,” KCS said.
