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 
 
¶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