January 18, 2001 From Association of American Railroads Train-It

Union Pacific Sells Line to Tex Mex

The Texas Mexican Railway Company is acquiring the Union Pacific Railroad's "Rosenberg Line" south of Houston to Victoria, Texas.

The transaction is expected to enhance trackage rights obtained by Tex Mex in connection with the 1996 merger of the UP and Southern Pacific and to help Tex Mex become a more efficient and effective competitor for rail traffic moving between the United States and Mexico.

The Rosenberg Line is an 85-mile line of track in southern Texas running from just south of Houston to Victoria (in the direction of Corpus Christi). The line has not been operated for a number of years.

Tex Mex owns and operates a line extending from the international Bridge at Laredo, Tex. (where Tex Mex connects with its affiliate, Transportation Ferroviaria Mexicana) to Corpus Christi. Tex Mex connects with lines of the Kansas City Southern Railway Company at Beaumont, Tex., using trackage rights over UP lines granted as part of the Surface Transportation Board's approval of the UP-SP merger. These trackage rights operations, however, extend over a significant portion of UP's busy "Sunset Route." Tex Mex and UP thus agreed to Tex Mex's purchase of the Rosenberg Line from UP.