Friday, November 22

Mexico's enormous commitment to the return of trains to boost its economy

For many years, the image of Mexico and its railway lines had been reduced to “The Beast,” the freight train on which thousands of migrants have traveled for decades from the southeast of the country on their way to the United States.

But in recent times, this image has begun to change radically.

The Mexican government has made an unprecedented investment in new passenger train lines that are marking the return of a means of transportation that was abandoned in the second half of the 20th century.

Currently they are already in operation Mayan Train, that covers historical and natural sites of the Yucatán Peninsula; and the Interoceanic Trainwhich connects the Pacific with the Gulf of Mexico in the southeast of the country.

In the center, the Interurban Train It is used by thousands of workers and students who travel daily between Mexico City and the city of Toluca.

And a quick access line is about to come into operation for travelers who use the new Mexico City airport, AIFA, through the Suburban Train.

Two other major lines have begun to be built: Mexico-Querétaro and Mexico-Pachuca. And in the new president’s plan, Claudia Sheinbaumis reopening three other routes to passengers: Mexico-Veracruz, Mexico-Nogales and Mexico-Nuevo Laredo.

The president has put these plans as her major infrastructure projects.

“Before they were privatized, now we proudly recover passenger trains, because they mean regional development, jobs, tourism and shared prosperity“Sheinbaum said in his inauguration speech when listing his government’s priorities.

Initially, it has allocated some US$7.5 billion.

BBC:

Analysts do not hesitate to point out that there are advantages in rail transport over others: It has a greater capacity to mobilize the population, it is safer, it has less environmental impact and it is more convenient to travel..

But for these benefits to be taken advantage of, explains Benjamín Alemán, a professor of Economics and consultant to the railway industry at the ATTRAIN firm, it is essential that the train lines are well planned and have budget guarantees.

“From the point of view of mobility, of the public transportation policy agenda, it is a good bet,” says Alemán.

“But this requires resources, not only to get it going, that is, to build it. Requires resources to operate: from now on it will be another front for public finances. And we have other equally or more pressing issues, such as health or public safety.”

And the questions about the opacity of projects such as the Mayan Train, or its environmental impactmake the multimillion-dollar new investments come under the microscope as well.

Getty Images: The Interurban Train has been the line with the most passengers.

Trains running (and their results)

Among the infrastructure works promoted by the president Andrés Manuel López Obrador (2018-2024), its flagship was the Mayan Train.

The president took up a project from the Ministry of Infrastructure, Communications and Transportation (SICT) and gave it his own stamp: connecting the entire Yucatan Peninsula by rail.

It was not easy: he invested a record amount of US$30 billion for the 1,500 km of roads, stations, hotels and tourist developments that have marked that region in which the main economic source for decades has been tourism on the Caribbean coast.

In its first months of operation (December-August), the Mayan Train transported almost 400,000 passengers.

Its construction and operation, however, has been the subject of questions, both because of the environmental impact it has generated in the tropical forest of southeastern Mexico, and because of its profitability, since it could take many years to recover its direct investment.

Getty Images: The Mayan Train required an investment of US$30 billion.

In the center of the country, the construction of Interurban Train It was started in 2014 but only this year was it able to connect Mexico City with Toluca due to multiple delays and the project’s 2.4-fold increase in cost until reaching almost the US$10 billion.

In the first eight months of this year, the train has transported 1.8 million passengers. And it is expected to have a greater influx when the last section that will take passengers to the terminal station that connects with the Metro and other transport is completed.

Of much less impact on passenger mobility has been the Interoceanic Train. This line connects the ports of Salina Cruz (Pacific) with Coatzacoalcos (Gulf of Mexico), on a route that includes eight intermediate stations in 303 km from coast to coast. It has had a low monthly influx, with an average of about 7,200 passengers.

But, unlike other projects, this Interoceanic train shares its investment of US$1 billion with the freight train for which this railway line was originally rehabilitated.

The lines that come

A project that López Obrador started, but that his government did not complete, was the expansion of the Mexico City Suburban Train that will take passengers to the Felipe Ángeles International Airport, on a 42-kilometer route.

This project will presumably come into operation in 2025, after multiple delays.

Sheinbaum has continued his predecessor’s policy on expanding railway networks since launching his candidacy. and now since his first month in officeor, launched the construction of two important interurban projects that will depart from Mexico City.

One is towards the city of Pachucawhich is located just 90 km north of the Mexican capital but whose high vehicular traffic makes transportation by land difficult, and its proximity makes air transportation unfeasible.

The extension of the Suburban Train will save passengers’ travel time by half and reduce the vehicular load on the roads.

BBC:

The other major project for the first half of the current government (2024-2030) is the enabling of a train line that will connect Mexico City with Queretaroone of the most important cities in terms of industrialization and tourism in the center of the country located about 225 km, but whose transfer takes motorists up to 4 hours.

Although this pair of projects involves construction or rehabilitation of less than 350 kmSheinbaum’s plan is to invest in some 3,000 km of railway lines. About US$7.5 billion was budgeted for this goal, barely a quarter of the cost of the Mayan Train.

In a next stage the plan is to reopen the historic route Mexico-Veracruzwhich was the first to move passengers since the 1850s.

Sheinbaum is now also looking to extend the service from the country’s capital hto the border with the United States.

On the one hand, a line will continue from Querétaro to Guadalajara (the second city of Mexico) and will continue along the Pacific coast until reaching the border city of Walnuts.

On the other hand, the second line will continue northeast to the city of Monterey (the industrial capital of the country) until reaching New Laredo.

“From the experience of the Mayan Train it is clear that what should and can be connected with a passenger service is the center and north of the country, as it was in the past,” the director of the Agency tells BBC Mundo. Regulator of Railway Transport, Andrés Lajous.

BBC:

“That is why it was proposed as one of the objectives of the President of the Republic to have passenger services to the center and north of the country,” he explains.

“They are areas with very important towns, in population and economic terms, where there are already many intercity trips that happen by road or plane and where the train can be an important alternative as it is more efficient, cheaper and comfortable.”

However, The current government must clear up the doubts that passenger trains generated in the past which led to its cancellation.

Past vs future

Mexico was one of the first countries in Latin America to lay railroads since the 1850s.

During the government of President Porfirio Díaz (1876-1910) there was the greatest expansion of railway corridors throughout the country.

For a long time the train was key to the development of the country, since there was no road network that reached as many points as the train did.

But with the passing of the decades and the increasing introduction of the automobile into economic and social life, the train began to lose its appeal.

By the 1990s, the decline of the state-owned company was unstoppable.

“Ferrocarriles Nacionales de México was in deficit. It had high operating costs and was not viable for public finances at that time,” explains Alemán.

In addition to passenger lines being inefficient, the government undertook a change of strategy towards the motor transport of people and goods.

He built key highways across the country, which “affected the survival of railroads.”

“In 1997, the privatization of railways began through concessioning. The government retained ownership of the infrastructure and gave a concession for a private company to operate that infrastructure and commit to its maintenance,” Alemán recalls.

If it showed three decades ago that under the operation of the State it was an investment without good numbers, why is it being resumed now?

Getty Images: The highway from Mexico City to Querétaro is often significantly congested.

Investment beyond the works

Lajous points out that the State’s abandonment of its trains left the decision of what to prioritize in the railway industry in the hands of private companies.

“What happened is that cargo was more profitable for private companies and the passenger service disappeared. However, passenger trains have many virtues,” he explains.

“Much of the view that there is criticism of passenger trains has to do with the fact that sometimess it is not understood that the connectivity of people between cities is also a public service and a necessity“, considers the official.

The construction of railway lines itself generates a local economic effect.

In the case of the Mayan Train, according to government figures, it generated 100,000 jobs direct and indirect in 5 years. For the new projects that started this year, a few 490,000 jobs.

Investment in previous projects has also benefited supplier companies, such as construction companies ICA, Carso or Mota Engi; or the manufacturing of train cars by the French-Canadian firm Alstom-Bombardier, which set up a factory in the state of Hidalgo.

Getty Images: Sheinbaum and Lajous (center) have carried out railway works since their time in the government of Mexico City.

Lajous highlights the fact that this type of projects generate economic dynamism beyond the works themselves.

“The returns on infrastructure investment, in a country that needs infrastructure, are gigantic for a government, for a society,” he explains.

“Not prioritizing people’s connectivity and economic development, I believe, has proven to be a mistake in the past. And what has been shown in the last six years is that we have to have a complete development perspective, which is what President Sheinbaum points out as shared development,” he adds.

Consultant Benjamín Alemán also points out that passenger trains go beyond the cost/performance dynamics of a company, whether public or private.

“It is clear that there are many benefits in rail transport that are not necessarily measurable in financial profitability, but rather economic benefits that are often intangible or monetizable,” he maintains.

The Labor and personal productivity of passengers increases with shorter transfer times. And even workers or students able to do their jobs remotely can take advantage of the same time on the train to do their activities.

But, as with other subsidized state projects, there are also red spots.

Getty Images: The geography of the center of the country makes the construction of new lines more complex.

The risks of poor planning

In the execution of the works, projects such as the Mayan Train or the Interoceanic Train have been little transparentwhich has been the subject of criticism from analysts and accountability bodies.

And the fact that the government has assigned the construction to the military engineers of the Secretariat of National Defense, and that they have been classified as national security works, has kept under reserve some aspects related to investments, expenses and returns.

Regarding the first two projects announced by Sheinbaum in October, the president again He has commissioned them to military engineerss, which could imply the same information protection scheme.

On the other hand, the Mayan Train has shown a dependence on holiday seasons being a train focused on tourism.

In the low season, its influx of passengers has been considerably reduced. And the local population has not yet replaced their road trips with trains.

The Interoceanic Train travels through towns with medium and low populationso a large increase in attendance is not expected.

This has led to questions about whether the new trains planned by Sheinbaum will suffer the same fate.

Regarding the environmental aspect, the new lines will not require new lines when using existing corridors. But it is expected that there will be studies of other types of impacts.

Presidency of Mexico: Sheinbaum has handed over his new railway projects to military engineers.

Alemán considers that the lines that connect cities in the center of the country are a good idea.

In general, he explains,Mobility by train over short and medium distances is very useful. “It can be an efficient and competitive transportation system,” he considers.

“But already thinking about going by train for longer distances, as has been proposed, from Mexico to Walnuts It’s going to be difficult,” he warns.

The capital is more than 2,000 km from that border city with Arizona. Already more than 1,000 km from Nuevo Laredoon the border with Texas.

“There are much more efficient transportation systems for that. unless you go as a tourist who wants to get to know the landscape and stop in different cities and towns,” says Alemán.

Lajous argues that new projects have a strong “planning and evaluation process.”

Getty Images: The flow of the Interoceanic Train has had very low months, such as June with a daily average of 113 users.

On the other hand, train lines require considerable resources to start and maintain.

Yes ok state subsidies are not unusual In the world, the government of López Obrador and now that of Sheinbaum have prioritized a model of public companies, which implies that almost all The resources to operate them will come from public taxes.

That is why Alemán considers that these train lines in Mexico will be “another front in public finances.”

To know if it is a good bet for Mexico, he maintains, “you have to do an analysis of priorities: public safety or mobility, public health or mobility. And there I think we could reach different conclusions.”

BBC:

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