Lessons from railway reforms in Brazil and Mexico

Abstract

his paper describes the rail restructuring processes in Brazil and Mexico during the 1990s. It first reviews the way in which the transfer of public railroads to private concessionaires was accomplished in these countries, and then focus on the major challenges faced by them just after the privatization. From this analysis, at least three core lessons are drawn: Concessioning can be a viable mechanism for rail privatization in some developing countries; regulatory problems inevitably emerge during and after the concessioning process; and, therefore, to minimize them, contract design should be carefully addressed in previous stages of the process.