Grupo Ferroviario Mexicano (Ferromex)

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Grupo Ferroviario Mexicano (GFM) won a 50-year Ferrocarril Pacifico Norte concession contract for the ownership and operation of freight transport on Mexico's North Pacific railway network on 30 June 1997. 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. GFM was the only bidder in the final round, and won the concession with an offer of US$ 527 million for the government. The government had initially intended to keep a 20% stake for the first 7 years, but agreed to sell 100% of the concession to GFM. GFM comprises the mining company, Grupo Mexico (74%), Constructoras ICA (13%), part of Mexico's largest construction group Empresas ICA, and US rail operator, Union Pacific (13%). GFM agreed to invest US$ 400 million (3.4 billion pesos) in locomotives and rolling stock during the concession. The concession allows GFM to determine its own tariffs, and safety and operating standards. The 6,524 km North Pacific network runs from Mexico City to Nogales on the US border. The concession for the 6520km network also includes the 1,509km Ojinaga-Topolobampo short line. Ferromex took over operations at the end of February 1998. In March 1999, the company had plans for investment of US$ 218 million. In 1999, ICA sold its equity stake to Union Pacific, which now holds a 26% stake in Ferromex. 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 of Ferrosur is pending approval from CFC. None