AMF: modifying concessions to railways violates the Constitution

The Mexican Association of Railways (AMF) affirmed that the modifications to the Regulatory Law of the Railway Service approved this Thursday in the Senate of the Republic violate the Political Constitution.

These modifications also violate various international treaties to which Mexico is a party, added the AMF.

Consequently, the AMF stated that it has a “deep concern”.

Railways

Among the most serious provisions contained in this ordinance, according to the AMF, the following aspects stand out:

Modify the time of the renewal of the concession

This amendment to the Law seeks to modify the term of the renewal of railway concessions from 50 to 35 years, which violates acquired rights and contravenes Article 14 of the Constitution with expropriation effects.

This damages legal certainty, severely affects investments made in the sector and inhibits new ones, with a strong negative impact on the modernization of the industry and with it, on the Mexican economy.

Controlled of marketing

The freedom to set rates is arbitrarily canceled, limiting its registration to every two years and prior «opinion of convenience» that the Railway Transport Regulatory Agency (ARTF) would issue at its discretion.

This violates the rule of law, invades the powers of the competent authority in accordance with the Constitution and ignores the fact that currently Mexican rail transport rates are among the most competitive worldwide.

Unconstitutional fines

It seeks to impose excessive, discretionary and disproportionate fines with respect to the sanctioned conduct and the affected legal interest, which violates Constitutional Article 22 and with it the legal security of the governed.

Conflict of attributions

The ARTF becomes a judge and party invading the scope of powers of other authorities in matters of economic competition, since with mere «evidence» it can determine that there is no effective competition, which contravenes Constitutional Art. 28.

Over-regulation

The railway sector is discriminated against with respect to other modes of transport by imposing regulations and administrative burdens on it by the ARTF, which makes the regulatory gap between the railway and motor transport larger and unjustified.

“We regret that the Mexican rail industry has not been given the opportunity to present objective information and to argue sufficiently about these amendments to the Law to all legislators. We reiterate our full willingness to do so, for the benefit of the economic development and well-being of the country,” said the AMF.