Image credits: Akshai Nanavati
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News Article

Kansas City Southern to Develop Railway Projects in Guanajuato

By Fernando Mares | Tue, 07/26/2022 - 15:39

Kansas City Southern (KCS) announced that its Mexican branch reached an agreement with the Ministry of Infrastructure, Communications and Transportation (SICT) to develop railway projects in Celaya, Guanajuato in exchange for a concession extension to exclusively operate a rail corridor. 

According to KCS, it reached an agreement with SICT to construct the final stage of the bypass Celaya-NBA, which consists of diverting 19km of the railway of the Ferroferico network, a railway network with two routes surrounding Celaya. The company is to replace the route that crosses the urban area, which will require an investment of over US$195.4 million and is expected to be ready by 2024. By providing these works, the company will be able to extend its concession to exclusively operate the rail corridor by 10 years until 2037. “This agreement and amendment reinforce our strong partnership with the Mexican government, and our long-standing commitment to support Mexico’s railway network, which plays an essential role in promoting the country’s economic growth,” said Oscar del Cueto, Country Head Mexico, KCS. 

Relocating the railway will reduce travel times for operators, which currently waste over 80 minutes by having to travel through the busy city and its 15 crossing points. Among other benefits, KCS assures that the project will improve safety and diminish emissions by reducing rail accidents, noise and air pollution. 

On Dec. 2, 1996, Mexico’s government granted KCS the concession to operate the cargo service with a validity of 50 years, of which 30 years are for the exclusive use of the rail line. The company can extend the concession’s validity once after it expires. KCS and SICT reached a formal agreement, but to make it official the extension must be published in the Official Federal Gazette (DOF).

In June 2022, KCS confirmed its investment of over US$120 million to a project portfolio in Mexico, which includes the Celaya Railway Bypass project. According to the company, the bypass’ works are to start by the end of 2022. 

The Celaya Bypass project is part of SICT’s National Railway Program 2022, which consists of 15 railway projects along the country requiring a public-private investment of US$33 billion, as reported by MBN. Unlike previous years, SICT will not retain control over all the projects. Instead, it will hand them over to the National Fund for Tourism Development (FONATUR), the Mexican Navy and private companies.
 

The data used in this article was sourced from:  
Infrastructure, Railway, Railroad, Kansas City Southern, KCS, Guanajuato, SICT, Celaya, Railway Infrastructure, Cargo, Logistics,
Photo by:   Akshai Nanavati
Fernando Mares Fernando Mares Junior Journalist and Industry Analyst