COLOMBIA's national concession agency INCO has begun legal proceedings against Tren de Occidente, which holds the 30-year concession to upgrade and operate the 498 km Pacific network connecting the port of Buenaventura with Cali, La Virginia and Armenia.

INCO maintains that the concessionaire has fallen behind with an infrastructure upgrading programme scheduled for completion in August 2005, has failed to acquire 10 locomotives and 500 wagons, and is carrying only 150 000 tonnes of freight a year against a target of 1million.

Tren de Occidente counters that the concession has been badly structured, and that the commitment to invest US$50m in new traction and rolling stock cannot be justified by the returns that would be made. 'The investment we must make to acquire rolling stock is not profitable for our partners', said Director Alfonso Patiño. He pointed out that moving more freight at current tariff levels would not cover track and rolling stock maintenance costs, operating and administration expenses, nor generate a return for investors and service the debt.

Deteriorating track quality on the main line to the port has been a particular concern, but Patiño said that a programme to replace timber with 20000 concrete sleepers on the 59 km Yumbo - Cali - El Cerrito section was due to begin at the end of March.