Ferrosur

The Ferrocarril del Sureste, known by its reporting mark FSRR and commonly referred to as Ferrosur, is a railway company that serves the southeastern regions of Mexico. It was established in 1998, as a result of the privatization of Mexico's railways, following a concession win to operate the southeastern railway, which includes the vital line connecting Mexico City with the bustling Gulf of Mexico/Atlantic Ocean port at Veracruz. Since 2005, Grupo México has held ownership of Ferrosur, and there have been longstanding plans to merge it with the company's other railway, Ferromex.
Ferrosur commenced operations on December 18, 1998. Its original ownership group included the construction company Tribasa and Grupo Financiero Inbursa. In 1999, Grupo Carso, another company associated with Carlos Slim Helu like Inbursa, acquired Tribasa. Then, in November 2005, Grupo México, the owner of Ferromex, completed the purchase of Ferrosur in a stock transaction valued at US$309 million.
It's important to note that a proposed merger of Ferromex and Ferrosur in 2002 had previously been rejected by the Mexican Federal Competition Commission (CFC) due to opposition from Grupo Transportación Ferroviaria Mexicana (TFM), a competitor of Ferromex.
Following Grupo México's acquisition of Ferrosur in November 2005, Kansas City Southern de México (KCSM), which succeeded TFM, sought to prevent the merger of Ferrosur and Ferromex through legal means. The CFC initially declined the merger in June 2006, expressing concerns about the concentration of power within the railway industry and its potential negative effects on consumers and competing shippers. However, in March 2011, a tribunal ruled in favor of Grupo México, and the merger was allowed to proceed. Grupo México has continued to operate both railways independently.
In May 2023, the Mexican Armed Forces occupied a portion of 127 kilometers (approximately 79 miles) of railways in Veracruz that belonged to Ferrosur. This move was made to facilitate the Interoceanic Corridor of the Isthmus of Tehuantepec, a significant government project. Mexican President Andrés Manuel López Obrador explained that this action was taken to prevent the possibility of future railway privatization and was in the interest of national security and the public good. The occupation was described as "unusual" and was perceived as an expropriation. Secretary of the Interior Adán Augusto López Hernández stated that the occupation had been discussed with Grupo México and characterized it as a "temporary occupation."
In late May 2023, there were reports that the government of Mexico paid Grupo México 7 billion pesos for the seized railway, a sum that was 2.5 billion pesos less than Grupo México's demand for the occupation of the railways. However, López Obrador clarified during a press conference that the government had sought to reach an agreement with Ferrosur that did not involve financial compensation. Instead, an agreement was reached where Ferrosur would pay a fee for the use of the occupied railways, and the Mexican Armed Forces would pay Ferrosur for using the railways leading to the port of Veracruz. The concession granted to Ferrosur in 1998 for the railways was extended by eight years, effectively remaining in force until 2056. Ferrosur would cover a fee for the right of way, while the state-owned Ferrocarril del Istmo de Tehuantepec company would be responsible for the operational and maintenance costs of the railways, ensuring their safety and optimal conditions.
Ferrosur's territory encompasses the ports of Veracruz and Coatzacoalcos, along with the railway line between Veracruz and Mexico City. This rail line features numerous tunnels east of Acultzingo, including the longest tunnel in Mexico, which often leaves Ferrosur's road locomotives coated in soot from repeated passages through these tunnels.
Category:Companies
Category:Mexican Railroads