Obama to subsidize ‘green’ trains … in Mexico

Obama to subsidize ‘green’ trains … in Mexico
Credit: California High-Speed Rail Authority

Not content with subsidizing green technology domestically, the Obama administration is now spending U.S. tax dollars to upgrade Mexican freight trains.

In September, the U.S. Trade and Development Agency (USTDA) approved a grant worth nearly $600,000 for the Asociación Mexicana de Ferrocarriles (AMF), a trade association for the Mexican rail industry, “to speed the adoption of green power technologies throughout Mexico’s freight rail locomotive fleet,” according to a press release.

“USTDA is pleased to partner again with Mexico’s national railroad association to support freight rail modernization efforts, this time focusing on cleaner and more efficient locomotives,” USTDA Regional Director Nathan Younge said at the time.

AMF officially opened the bidding process this month, asking “interested U.S. firms that are qualified on the basis of experience and capability to develop a Technical Assistance for the Green Locomotive Technologies Project in Mexico.” Mexico’s freight railway system is owned by the national government but operated by private companies under government charters who coordinate their activities through the auspices of the AMF.

The technical assistance will focus on applying new technologies to diesel locomotives that will reduce emissions while improving fuel efficiency, such as “advanced auxiliary power units to retrofit older freight locomotives, emissions control systems, [and] idle reduction technologies.”

According to the solicitation, “only U.S. firms and individuals may bid on this USTDA-financed activity,” and “all goods and services to be provided by the selected firm shall have their nationality, source, and origin in the U.S. or host country.”

The program will also “examine the potential development of federal- and state-level government incentive programs in Mexico,” indicating that additional subsidies could be awarded in the future.

Even without direct government grants, planning documents leave open the possibility that Mexico could seek additional financing through entities such as the Export-Import Bank.

Even without direct government grants, planning documents leave open the possibility that Mexico could seek additional financing through entities such as the Export-Import Bank. Both Ex-Im and the USTDA have been accused in the past of engaging in crony capitalism, with opponents claiming they use government money to pick winners and losers.

Rick Manning, Vice President of Public Policy and Communications at Americans for Limited Government, said of the plan:

At a time when this Administration plans regulations on railcars that will create crippling cost increases for U.S. railroads, it is absurd that they are spending taxpayer dollars to retrofit and upgrade Mexican rail capacity.

Once again, Obama’s policies harm U.S. productivity and jobs, while benefitting industry in other countries.

The project is included in the Major Infrastructure Projects in Mexico resource guide, which was developed “in order to support the country’s ambitious reform efforts and position U.S. firms for success implementing critical infrastructure projects,” which are expected to exceed $600 billion over the next four years.

“We believe this guide will serve as a key resource for U.S. firms interested in supporting priority projects associated with Mexico’s new National Infrastructure Program,” said USTDA Director Leocadia Zak.

This report, by Peter Fricke, was cross-posted by arrangement with the Daily Caller News Foundation.

LU Staff

LU Staff

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