Identifier
Created
Classification
Origin
08CIUDADJUAREZ1100
2008-12-09 23:17:00
UNCLASSIFIED
Consulate Ciudad Juarez
Cable title:  

RAIL TRAFFIC DOWN, AND LINES OF POLITICAL SUPPORT FOR BYPASS

Tags:  BEXP ELTN PGOV MX 
pdf how-to read a cable
P R 092317Z DEC 08
FM AMCONSUL CIUDAD JUAREZ
TO SECSTATE WASHDC PRIORITY 5764
INFO AMEMBASSY MEXICO 
AMCONSUL CIUDAD JUAREZ
UNCLAS CIUDAD JUAREZ 001100 


DEPARTMENT PLEASE PASS TO USDOT

E.O. 12958: N/A
TAGS: BEXP ELTN PGOV MX
SUBJECT: RAIL TRAFFIC DOWN, AND LINES OF POLITICAL SUPPORT FOR BYPASS
SHIFT

REF: a) CIUDAD JUAREZ 641; b) CIUDAD JUAREZ 989

UNCLAS CIUDAD JUAREZ 001100


DEPARTMENT PLEASE PASS TO USDOT

E.O. 12958: N/A
TAGS: BEXP ELTN PGOV MX
SUBJECT: RAIL TRAFFIC DOWN, AND LINES OF POLITICAL SUPPORT FOR BYPASS
SHIFT

REF: a) CIUDAD JUAREZ 641; b) CIUDAD JUAREZ 989


1. Summary: In recent days, President Felipe Calderon
surprised local officials on both sides of the U.S.-Mexico
border by throwing his political weight behind a plan to build a
series of underpasses to facilitate the flow of rail traffic
through the center of Ciudad Juarez. Mayors John Cook and Jose
Reyes Ferriz of El Paso and Juarez are unhappy with the
proposal, which they believe will a) disrupt vehicular traffic
in Juarez during several years of construction, b) lead to an
increased flow of dangerous cargo through heavily populated
neighborhoods, and c) undercut efforts to move cross-border rail
traffic to a new port of entry at Santa Teresa, New Mexico.
Governor Bill Richardson, a supporter of the Santa Teresa
bypass, has not responded to this latest turn of events, but
Chihuahua governor Jose Reyes Baeza Terrazas, who had also
promoted the Santa Teresa route, appears to be capitulating to
Mexico City's new plan. While safety concerns are high on the
list of El Paso and Juarez city priorities, other political and
economic factors appear to be at work in Mexico City. U.S. and
Mexican railroads believe that with the underpasses in place,
the Juarez city government will have to lift its night-only
restrictions on rail traffic through the city. End summary.


2. Consulate officers continue to talk with railroad and
government officials from both the United States and Mexico to
track progress on a proposed new rail crossing at Santa Teresa,
New Mexico. This project was raised by Mexico's Secretary of
Communications and Transport Tellez with U.S. Secretary of
Transportation Peters on October 6, 2008. This report provides
information about the quantity and nature of materials
transiting Ciudad Juarez and El Paso along the current downtown
route.

WHAT'S SHIPPED THROUGH THE CORRIDOR


3. In recent conversations, Burlington Northern Santa Fe (BNSF)
Assistant Vice President Richard Miller has told Consulate
officers that most of the rail traffic flowing southbound
through Juarez carries raw materials originating from southern
California sea ports and grain coming from the U.S. west coast
and Midwest. The primary destinations for these products are
manufacturing plants in the cities of Chihuahua, Zacatecas and
Guadalajara, rather than Juarez. Miller estimates that less

than five percent of the rail traffic flowing through the
corridor has the immediate border region as its final
destination. Most products flowing northbound are finished
goods from plants further south in Chihuahua and Guadalajara,
and continue by train to distribution hubs in Chicago and Los
Angeles. Javier Ortiz, a rail consultant to the New Mexico
Border Authority, said that maquilas in the border region prefer
to ship their raw materials via truck due to the lack of
adequate rail facilities in Juarez. Maquilas on the border ship
their finished goods across the border by truck to El Paso,
where they remain on trucks for distribution or are put on
trains to follow the same shipping routes as other finished
goods from Mexico.


4. According to a September 2008 report from the Juarez
Municipal Office of Civil Protection, rail lines carry
significant quantities of at least 10 dangerous chemicals
through the urban area. The most abundant chemical, according to
the Atlas of Natural Risks of the Municipality of Juarez, is
hydrofluoric acid (HF). HF is shipped into Juarez from El Paso
at the rate of at least 2,100 tons per month. Its final
destination is the multinational Solvay plant 15 miles south of
the city. According to the U.S. Department of Health and Human
Services, an accidental release of HF forms an aerosol acid
cloud which can cause serious bone damage and death by burns to
the skin, tissue or lungs. Even minor exposure can cause skin
burns and blindness. BNSF's Miller and Union Pacific (UP)
Director of Public Affairs Luis Heredia both said their
companies follow all USG regulations regarding the
transportation and handling of HF and other hazardous materials
through the corridor, regardless of whether the shipment
originates in the United States or Mexico. Proponents of the
rail bypass and the Santa Teresa border crossing often cite the
dangers presented by HF and other chemicals as a primary reason
for moving rail traffic out of Juarez and El Paso.

WHO SHIPS AND HOW MUCH


5. Miller and Heredia report that BNSF and UP hold roughly 65
percent and 35 percent shares of the U.S. cross-border traffic
through this corridor, respectively. Ferrocarril Mexicano
(Ferromex) is a monopoly and captures 100 percent of the market
share on the Mexican side. Ferromex is partially owned by Union
Pacific, but BNSF is its largest customer in the region. Miller
and Heredia said that BNSF and UP ship roughly the same cargo.
Miller said BNSF customers view rail service as a commodity and
make their selection of rail company based on price and
availability.


6. 2008 rail traffic through the Juarez/El Paso rail corridor
is down 30 percent from 2007, according to unpublished reports
provided to consular officers by BNSF, UP and Ferromex. In the
period January to October 2007, total north and southbound
traffic was 152,500 car loads. In the same period for 2008,
traffic fell to just under 110,000 car loads. According to
these reports, traffic had been increasing at an annual rate of
roughly 15 percent dating back to 2002. BNSF's Miller says
demand has been affected by the downturn in the U.S. economy,
which has hit their manufacturing customers in southern
Chihuahua especially hard. Miller also claimed, however, that
BNSF is currently operating at capacity due to the limited time
window in which its trains can transit Juarez. UP's Heredia
said prices for raw materials used in manufacturing and grain
had spiked, hurting demand in Mexico for southbound freight
service. Heredia reiterated previous comments that Union
Pacific's north/south traffic along this corridor was "a drop in
the bucket" compared to east/west traffic transiting through El
Paso on the U.S. side.


7. COMMENT: Proponents cite safety and social justice issues as
primary reasons for a new Geronimo/Santa Teresa rail bypass and
international border crossing. Less has been made of the
economic justification for the project, which helps explain why
the railroads have provided only lukewarm support and continue
to push for detailed feasibility studies. Robert Andrade,
Border Affairs Assistant in the El Paso Mayor's office, said
President Calderon's support for the Santa Teresa bypass was
based on the need for an outlet for goods shipped to and from
the proposed seaport in Punta Colonet, Baja California.
However, this justification has only been mentioned in passing
by other representatives from governments on both sides, and
with Calderon's most recent instructions, the stage is set for a
confrontation between Mexico City and the railroads on the one
hand, and the border cities on the other.


MCGRATH