Mexico: COFECE calls out lack of competition in rail sector

The Federal Commission for Economic Competition (COFECE) of Mexico has determined that there is no effective competition in the rail freight transport sector in various routes. The origin is a series of industrial complexes in the state of Veracruz, accusing Grupo México and its subsidiaries of maintaining a dominant position in the market, enough to set prices for the transportation service of chemicals and petrochemicals.

“The lack of competition is explained by the exclusivity that they have to operate on their concessioned roads, which have not received right-of-way requests by any other concessionaire […] and since other modes of transport are not a viable alternative for these products…” COFECE explained.

The investigation on the sector was launched in September 2018, giving Grupo México’s economic agents (including Kansas City Southern Mexico and Ferromex) ample time to present their arguments and documents. If the infraction is confirmed, the Railroad Transport Regulatory Agency must establish the necessary regulation to resolve the situation.
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