Mexico has a freight railway system owned by the national government and operated by various entities under concessions (charters) granted by the national government. The railway system provides freight and passenger service throughout the country (the majority of the service is freight-oriented), connecting major industrial centers with ports and with rail connections at the United States border. Passenger rail services were limited to a number of tourist trains between 1997, when Ferrocarriles Nacionales de México suspended service, and 2008, when Ferrocarril Suburbano de la Zona Metropolitana de México inaugurated Mexico's first commuter rail service between Mexico City and the State of Mexico. This is not including the Mexico City Metro, which started service in 1969.
History
Construction
Mexico's rail history began in 1837, with the granting of a concession for a railroad to be built between Veracruz, on the Gulf of Mexico, and Mexico City. However, no railroad was built under that concession.
In 1857, Don Antonio Escandón secured the right to build a line from the port of Veracruz to Mexico City and on to the Pacific Ocean. Revolution and political instability stifled progress on the financing or construction of the line until 1864, when, under the regime of Emperor Maximilian, the Imperial Mexican Railway Company began construction of the line. Political upheaval continued to stifle progress, and the initial segment from Veracruz to Mexico City was inaugurated nine years later on January 1, 1873 by President Sebastián Lerdo de Tejada.
President Lerdo and his successor Porfirio Díaz encouraged further rail development through generous concessions that included government subsidies for construction. At the beginning of his first term Díaz inherited of railroads consisting almost exclusively of the British-owned Mexican Railway. By the end of his second term in 1910, Mexico boasted of in-service track, mostly built by American, British and French investors.
From a small start, the railway network expanded significantly, linking many parts of the country previously isolated. The Interoceanic Railway linked Mexico City to the port of Veracruz; the Monterrey and Mexican Railroad linked that northern city with the Gulf Coast port of Tampico; the Southern Pacific of Mexico linked west coast cities from Guaymas to Mazatlan; the Sonora Railway linked Nogales to the port of Guaymas; and the Mexican Central Railroad went north to the U.S. border at El Paso, Texas. The British invested £7.4 million in railways during the decade of the 1880s, jumping to £53.4 million in 1910s. The decade-total of new investment in mining went from £1.3 million in 1880s to £11.6 million in 1910s. Investments in land and other properties rose from near zero in 1880s to £19.7 million in 1910s. The totals reached £135 million, almost as much as the United States.
Growing nationalistic fervor in Mexico led the Díaz administration to bring the bulk of the nation's railroads under national control through a plan drafted by his Minister of Finance, José Yves Limantour. The plan, implemented in 1909, created a new government corporation, Ferrocarriles Nacionales de México (FNM), which would exercise control of the main trunk rail lines through a majority of share ownership.
Nationalization
The rail system deteriorated greatly from neglect during the period of the Mexican Revolution. Following the Revolution, the entirety of the Mexican rail system was nationalized between 1929 and 1937. In 1987 the government merged its five regional railroads into FNM. During the later period of national ownership, FNM suffered significant financial difficulties, running an operating deficit of $552 million (37 percent of its operating budget) in 1991. Competition from trucking and shipping decreased railroad's share of the total freight market to about 9 percent, or about half of rail's share a decade earlier.
Privatization
In 1995, the Mexican government announced that the FNM would be privatized and divided into four main systems. As part of the restructuring for privatization, FNM suspended passenger rail service in 1997.