News | December 13, 2000

Sale of Union Pacific's 'Rosenberg Line' to be allowed

STB decision will help Tex Mex become a stronger competitor in U.S.-Mexico rail traffic market

The Surface Transportation Board (STB) has announced a decision allowing the Texas Mexican Railway Company (Tex Mex) to acquire and operate the Union Pacific Railroad Company's (UP) "Rosenberg Line" south of Houston to Victoria, Texas. The STB's approval of the transaction is expected to enhance trackage rights obtained by Tex Mex in connection with the 1996 merger of the UP and Southern Pacific (SP) rail systems, and to help Tex Mex become a more efficient and effective competitor for rail traffic moving between the United States and Mexico. The transaction was privately negotiated between Tex Mex and UP.

The Rosenberg Line is an 85-mile line of track in southern Texas running from just south of Houston to Victoria (in the direction of Corpus Christi). UP currently owns the Rosenberg Line, which, prior to the UP-SP merger, was owned by the SP system. The line has not been operated for a number of years.

Stronger rail services should allow better use of NAFTA
Tex Mex owns and operates a line extending from the International Bridge at Laredo, TX (where Tex Mex connects with its affiliate, Transportation Ferroviaria Mexicana), to Corpus Christi. At Beaumont, TX, Tex Mex connects with lines of The Kansas City Southern Railway Company, using trackage rights over UP lines granted as part of the Board's approval of the UP-SP merger. These trackage rights operations, however, extend over a significant portion of UP's busy "Sunset Route." Tex Mex and UP thus agreed to Tex Mex's purchase of the Rosenberg Line from UP. The line's transfer to Tex Mex is expected to:

  • restore service to businesses along the line,
  • add rail infrastructure to the Houston-Gulf Coast region,
  • free up capacity on some of UP's busiest routes, and
  • generally to help inject new and vigorous competition into southern Texas rail operations and traffic moving under the North American Free Trade Agreement.

    In addition to approving the line's sale, the STB also sanctioned the procompetitive, private agreement the parties have reached expanding trackage rights granted as an STB-imposed condition to the UP-SP merger. Through this agreement, Tex Mex may move traffic originating or terminating on the Rosenberg Line and interchange traffic with railroads other than UP.

    A printed copy of the STB decision is available for a fee by contacting D~-To-D~ Office Solutions, Room 405, 1925 K Street, NW, Washington, DC 20006; you also may call 202-466-5530. This decision also is available at http://www.stb.dot.gov.

    Edited by Bob Arguero
    Managing Editor, GovCon