Mexico City Government Celebrates International Ruling Halting Taxi Privatization Attempt
Mexico City, April 2 – The Government of Mexico City, led by Clara Brugada Molina, has acknowledged the efforts of the Ministry of Economy and the cabinet of President Claudia Sheinbaum Pardo, following a favorable international arbitration ruling for the Mexican State. This decision concerns a contentious project aimed at privatizing the taxi service in the capital.
According to an official statement, the dispute originated in 2016 when a concession was granted to a foreign-invested company. This concession mandated approximately 140,000 taxi drivers to install digital tablets in their vehicles, replacing traditional taximeters, and to pay a commission for each fare. The Mexico City government indicated that this measure intended to privatize the taxi service and generate substantial profits for the shareholders of the company involved. However, even during her campaign for Head of Government, Sheinbaum Pardo expressed her opposition to this model.
Arbitration Process and Favorable Outcome
With the commencement of the Fourth Transformation administration, the concession was revoked. This led to an arbitration process before the International Centre for Settlement of Investment Disputes (ICSID), a World Bank body responsible for resolving disputes between investors and states.
On March 26, the Arbitral Tribunal ruled in favor of the Mexican State, determining that no provisions of the North American Free Trade Agreement (NAFTA) were violated. Furthermore, it rejected the demanding companies’ request for compensation amounting to nearly 3 billion dollars. The ruling also stipulated that the foreign companies must cover the costs of the legal process, as their claims were dismissed.
Government Collaboration and Future Implications
The Mexico City government highlighted its collaboration with the federal government throughout the nearly five-year litigation, providing crucial information regarding the case’s origins. The local administration emphasized that this resolution prevents Mexico City residents from bearing the cost of past decisions that, it asserted, sought to privatize public services. It also congratulated the legal team involved in defending the country.
This outcome underscores the government’s commitment to protecting public services from privatization attempts and ensures that decisions made in the past do not negatively impact the city’s inhabitants. The ruling is seen as a significant victory for the Mexican State and its efforts to maintain control over essential public utilities.
