Photo: Grupo México

By THÉRÈSE MARGOLIS

On the orders of Mexican President Andrés Manuel López Obrador (AMLO), naval officers in the early morning hours of Friday, May 19, took over three private railway lines in the coastal Mexican state of Veracruz.

The railways, which belonged to Grupo México —  the third-largest business conglomerate in the country, owned by billionaire Germán Larrea — were seized along the state’s Isthmus of Tehuantepec in what private sector investors have said constitutes “an unprecedented government expropriation.”

Mexican Interior (SeGob) Secretary Adán Augusto López called the takeover of the railways “temporary” and said that it was in the “public interest,” as part of a federal plan to update a rail-to-sea network on the Isthmus of Tehuantepec, a narrow region of land between the Gulf of Mexico and the Pacific Ocean, that is key to several of AMLO’s so-called megaprojects such as the Tren Maya tourist train in the Yucatan Peninsula and the Dos Bocas refinery in his home state of Tamaulipas.

Under the argument that the project is a matter of national security, AMLO decreed the expropriation of the roads in favor of the Navy just hours before the takeover, which Larrea dubbed “surprising and unusual.”

Larrea, often referred to as Mexico’s Copper King because of his companies’ heavy investment in the mining sector, has been at loggerheads with the president over the course of López Obrador’s four and a half years in office.

AMLO has notoriously attacked most big private corporations in Mexico, calling them “corrupt” and “money-hungry,” and Grupo México has been no exception.

Notwithstanding, AMLO recently gave a tacit blessing to Grupo México’s proposed buyout of Banamex bank, which was owned by the New York-based Citibank Group that decided to pull out of Mexico in October of last year.

López Obrador has insisted that Banamex must be purchased by a Mexican firm, but several previous proposals for its buyout, including by billionaire Carlos Slim, have fallen through, leaving Grupo México as the only viable option.

As a result of the railways expropriation, Grupo México shares on the Mexican Stock Exchange (BMV) fell by 4.29 percent Friday.