INTRO: By focusing on customer service and investing in both infrastructure and new equipment, Mexico’s three major concessionaires are working to provide safe, reliable and punctual freight service and win back traffic lost to road. Senior executives from TFM, Ferromex and Ferrosur spoke to Robert Preston about the progress they have made and the challenges ahead

For Chris Aadnesen, Executive Vice President at Transportación Ferroviaria Mexicana (TFM), Mexican rail privatisation has opened a ’huge window of opportunity’. The new private operators simply cannot afford to stumble in their efforts to rebuild customer confidence and recapture lost traffic. Should they squander this opportunity, Aadnesen thinks that belief in the railway ’wouldn’t be there’ and that the prospects for sustained long-term growth would vanish.

Having won a 50-year concession to operate the Northeast Railway with a bid of 11·07bn pesos in December 1996, TFM began operations on June 24 1997. Its strategy since then, forming the basis of the business plan prepared for the bid, has been to distil 30 years of technical and management innovation on ’world class’ railways in the USA into a five-year programme for the Northeast Railway. Prior to privatisation, Aadnesen feels that the railway was not offering ’a viable transportation product’, and he sees TFM’s key task as satisfying the customer by providing punctual, reliable and secure freight service.

At TFM’s request, a management team led by Aadnesen moved into the Northeast Railway’s Monterrey headquarters in February 1997, to undertake what he terms ’guardianship’ prior to the handover in June. This enabled TFM managers to ensure that no contracts were signed or disposals made that could have harmed the business after handover, and also gave them the opportunity to get to know the railway and its customers in more depth than due diligence had allowed.

With this guardianship contributing to a ’fairly seamless’ transfer, TFM inherited what Aadnesen describes as ’a pretty good railroad’ , with 70% of its 4283 km laid with 57 kg/m rail and 62% on concrete sleepers, although the twin-block design adopted by FNM has proved vulnerable to corrosion. Having spent US$100m on capital investment projects in 1997 and $68m in 1998, TFM is investing $59m this year. It has completed six inherited rail renewal projects and to increase capacity has lengthened 11 passing sidings on its main line between Nuevo Laredo and San Luis Potosí to 3048m, with six more due for completion by the end of March this year. Five 3962m sidings have been installed at S