Ferrocarril del Sureste SA de CV

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On July 7, Grupo Tribasa SA led the consortium that won the final round of bidding for the 50-year Ferrocarril del Sureste concession for the operation of freight transport on Mexico's southeastern railway network. This is the second of three concession contracts to operate freight services on Mexico's national network. To prepare for these private concessions National Railways of Mexico (FNM) divided the national network into three regional systems, a terminal company serving greater Mexico City, and the Chihuahua-Pacific short-line network. Grupo Tribasa, a Mexican construction and toll-road company, and Inbursa (Grupo Carso) bid US$ 322 million (2.89 billion pesos) for the concession, outbidding the Illinois Central Railway consortium's offer of 1.17 billion pesos. The private sponsors will invest US$ 278 million in the first five years of the concession with the rehabilitation works. The 1,488 km southeastern network connects Mexico City to the gulf ports of Veracruz and Coatzacoalcos. The project company was named Ferrosur. As part of the concession, the sponsors obtain a 25% stake in the Mexico City terminal company (25% shares are held by the other freight concessionaires). The private sponsors made its final payment to the government in mid-December 1998 and officially took control of the railroad. Tribasa has decided to operate the railway itself. It is attempting to persuade Volkswagen to use the railway to transport vehicles from its plant to Mexico City. In 1999, Grupo Carso, through its subsidiary Frisco, acquired Tribasa's 67% stake in Ferrosur for US$ 330 million (US$ 73 million in cash to Tribasa and US$ 237 million in liabilities assumed by the group). In November 2005, Grupo Mexico announced it would buy 100% of Ferrocarril del Sureste (Ferrosur) for US$309 million (2,600 million Pesos), pending approval from Comision Federal de Competencia (CFC -Mexico's antitrust comission). A proposed merger between Ferromex and Ferrosur was rejected in 2002. Acquisition by Ferromex pending approval from CFC. None