More Booms In A Railroad Boomtown: The Fastest Growing Hamlet In New Mexico

August 1st, 2014 No Comments

 

Union Pacific's huge new train yard in Santa Teresa, New Mexico

Union Pacific’s huge new train yard in Santa Teresa, New Mexico

I visited Santa Teresa, NM earlier this year for this story for Al Jazeera America on the massive new train yard Union Pacific has constructed in a barren expanse of desert a few miles north of the New Mexico border with Mexico and 13 miles west of El Paso.

In a place where there was little more than mesquite and scrub brush a few months ago, the railroad hastily constructed a yard 11.5 miles long and a mile wide, greased along with substantial tax breaks, re-written regulations and special economic incentives paid for the state government. In fact, so cozy and congratulatory was everyone at the ribbon-cutting ceremony at the end of May, New Mexico Gov. Susanna Martinez asked the audience to stand and applaud the railroad, which they did happily.

The pro-business atmosphere in the new railroad boomtown of Santa Teresa was upbeat too. As local entrepreneur Jerry Pacheco said when he was driving me around the train yard a few weeks before it opened, Santa Teresa and San Jeronimo, its sister city directly across the border, were “a blank slate where business can do practically anything it wants.”

More than that, this project appeared to me to be a huge channel through which global capital could flow.  Double stacked trains taller than a two-story building now could travel at speeds up to 70 miles an hour directly from the Port of Long Beach without stopping to pass customs.  Up to two miles long and traveling over tracks Union Pacific has spent hundreds of millions to upgrade, the cargo would travel swiftly to  Santa Teresa, a short drive from the maquiladores in Juarez. At the FoxConn plant just across the Mexican border from Santa Teresa, where all of the Dell computers used in the U.S. are manufactured, company vice president Pancho Uranga told me that he was negotiating with U.S. Customs to establish a pilot project where U.S. customs agents would set up operations inside the FoxConn plant, able to clear cargo there  before it left the factory. It wouldn’t have to stop at the border either.

My reporter’s hunch then was that there was much more of this border busting for global capital soon to come to this desolate place. This proved true yesterday when, at a ceremony in Beijing, the Chinese development company China Hyway Ltd. announced that it had signed an agreement with the state of Chihuahua to build a rail line from a port on the Pacific coast of Mexico directly to the border crossing south of Santa Teresa.

If this deal is real, goods from Asia could bypass the Port of Long Beach and enter the United States through Mexico. The U.S. railroad companies would still get their piece of the action. The two major Mexican railroads– Ferromex and Kansas City Southern de México — have been owned in whole or in part by U.S. rail companies since the Mexican government privatized the railroads in 1998. Ferromex is a joint subsidiary of  Grupo Mexico and Union Pacific, which owns 26 percent of the company. Kansas City Southern de México is a wholly owned subsidiary of Kansas City Southern.

Union Pacific trains at Santa Teresa

Union Pacific trains at Santa Teresa

The governor of Chihuahua César Duarte and Roberto Sandoval, the governor of Nayarit, the Pacific Coast state where the new port is supposed to be built, were on hand to announce the deal in Beijing. Although there are many obstacles ahead for this project (such as getting the cooperation of the Mexican railway companies) China Hyway said construction was slated to start on the new port and the rail line by the end of this year.