This case examines the Mexican government's initiative to reintroduce passenger train service, highlighting its economic impact and the associated challenges for freight rail concessionaires. Through the November 2023 presidential decree, these companies are encouraged to submit proposals for the implementation of passenger services on specific routes. The analysis focuses on the financial viability of adapting existing infrastructure for dual use without guarantees of state financial support. This scenario poses significant dilemmas in terms of initial investment, operation and maintenance costs, and potential effects on the profitability of existing operations. The possibility of military intervention or entry of new players if existing companies do not adequately respond to government demands is also discussed. The case uses a cost-benefit analysis approach to assess the economic implications of this policy and its alignment with national development and sustainability objectives.
Ferronales 2.0: Are Passenger Trains Returning to Mexico?
Ferronales 2.0: Are Passenger Trains Returning to Mexico?
Autor: Alemán Castilla, Benjamín; Rodríguez Pueblita, José Carlos
Área Académica: Entorno Económico
Clave: EE-24-eC-02
Formato: PDF
Tipo: Caso
Año de publicación: 2024
Idioma: Inglés
Tema: Investment and Feasibility Challenges
Número de páginas: 11
Fecha de revisión: May 2024
Origen: IPADE
Keywords: Economic viability, Input-Output Matrix, Government subsidies, governance structures, market failures, sustainability, economic regulation