Guatemala to Review Rail Contracts

After the transfer of the controlling interest to the State, the company will review existing contracts with rail customers.

Friday, September 13, 2013 reports: "The lease to Compañía Bananera Guatemalteca, the pipeline easement for fuel transport with Texaco, the route for LPG transport with Zeta Gas, signed in 2002, and the easement for electric power transfer with Generadora Eléctrica del Norte and a similar one with Generadora del Sur, signed in 2001, are the contracts that the state will recover when it gains the rights for the railroad. "

The contracts were held for 16 years by the Railroad Development Corporation (RDC), owner of Ferrovías. Carlos Samayoa Flores, controller of Ferrocarriles de Guatemala (Fegua), said that when the payment of $14.6 million set by the International Centre for Settlement of Investment Disputes (ICSID) has been made, they will review the leases and ways of developing better income.

For its part, the French company Alstom has shown interest in exploring rail projects in Guatemala and will approach the government when the issue has been resolved, said Rodelmar Ocampo, Director of the company's Transport Division.

Ocampo said that they could explore the route which goes from north to south as it has great potential or the metropolitan projects such as the one discussed years ago from El Obelisco to Mixco. The investment, he said, would be $20 million per kilometer.

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More on this topic

Guatemala Pays $14.6 Million to Retake Trains

September 2013

With the payment to be made next month, the 82% stake held by Ferrovías will become property of the Guatemalan state.

This will see the fulfilment of the judgement by the International Centre for Settlement of Investment Disputes (ICSID), which ruled in favor of the company subsidized by Railroad Development Corporation (RDC) in 2012.

Railway Development Plan in Guatemala

June 2013

Plans are underway for an inter urban railway system for Guatemala City, with an estimated investment of between $65 to $125 million.

Carlos Samayoa, Controller at Ferrocarriles de Guatemala (Fegua), explained that the urban railway is a project that consists of a first section going from Centra Norte, Zone 17, to the Central Station, and a second axis to the south, to Justo Rufino Barrios zona 21, but the idea is to expand it to the municipality of Villa Canales.

A Light at the End of the Tunnel for Guatemalan Railway

July 2012

After the court decision that awarded the Guatemalan State the rights to the railroad, President Perez Molina has announced interested in its recovery.

The president of Guatemala announced that investors, who as yet have not been identified, would be willing to bear the cost of debt that the State has with company "Ferrovías", calculated at more than $11 million.

State of Guatemala unsuccessful in stopping Ferrovias lawsuit

November 2008

Ciadi, based in Washington, rejected the request by the State of Guatemala to suspend the suit for $65 million that was presented by Ferrovias in 2007.

By rejecting the objection, the International Center for the Resolution of Investment Disputes (Ciadi) asserts that it has the jurisdiction to handle the case in which the RailRoad Development Corporation (RDC), the majority shareholder in Ferrovias, is suing the Government of Guatemala.