KCS estimates reopening of KCSM Nuevo Laredo Gateway

Kansas City Southern said that its Mexican subsidiary, Kansas City Southern de Mexico, S.A. de C.V. estimates that, if there are no new complications, its Nuevo Laredo gateway will be reopened for service sometime the weekend of July24-25 with the Anahuac Bridge repairs under way and expected to be in service by then. With the anticipated restoration of service, all current service embargoes imposed on July 3 are expected to be lifted early the week of July 25.

"I have just completed my
third inspection of the area and am pleased to report that very significant
progress has been made," said David L. Starling, KCS president and chief
operating officer from Mexico. "As a result, we anticipate, if there are no
further unforeseen complications, the Anahuac Bridge will reopen sometime this
weekend and that we can restore service to the KCSM Nuevo Laredo gateway at
that time. As a result, we plan to lift all current service embargoes imposed
on July 3 early next week.

Divers were at the Anahuac
Bridge to inspect the bridge’s piers under the water line. After their
inspection, no pier damage was found and a missing beam was located and will be
reused in the bridge repairs that are under way. Reopening of the Anahuac
Bridge will allow the Nuevo Laredo Gateway and the main line to Saltillo to
reopen.

A secondary route being
used to divert some limited cross border traffic is KCSM’s Matamoros to
Monterrey "F" line. That line has reopened and traffic is moving at reduced
speeds. Ballast and large rock has been added to segments of that line washed
out over the weekend, allowing restored service to this line on a restricted
basis.

The "F" line was closed on July
16 for 12 hours as local authorities in Reynosa prepared for flooding anticipated
by the release of water from the nearby Falcon Dam upstream from Reynosa. On
Saturday, July 17, the International Boundary and Water Commission had to open
floodgates at the Falcon Dam where the water level was at 128 percent of
capacity. As a result, the Rio Bravo/Rio Grande and Salado rivers overflowed
and washed out track at two locations near Reynosa on July 17.

KCSM continues to monitor
water levels in various areas around the "F" line and is hopeful that they will
continue to recede over the coming days. However, periods of rainfall are
expected over the next couple days so this situation remains day to day for the
time being.

Rail service in northern
Mexico has been disrupted for all carriers as a result of Hurricane Alex, which
made landfall in northeast Mexico on June 30. Highway infrastructure throughout
northern Mexico also was severely damaged. The hurricane caused significant
track damage around the Monterrey and Saltillo areas, as well as on the lines
to Nuevo Laredo and Matamoros.