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RDC victorious in Guatemalan railway arbitration
Unfortunately, the railroad itself is finished as it has been subject to wholesale illegal salvage in remote areas, and in developed areas local governments have helped themselves to the right-of-way. A potentially useful asset for the future was destroyed by very short term political thinking.
Good for RDC though!
This case is a total disgrace. What entity would want to invest in Guatemala after hearing about what happened. I rode the line back in 1972 when there was still some steam power in use. It was under-utilized and broken down even back then. I’m happy that the RDC won this victory.
Well, the railroads have been falling apart anyway. I guess that just seals the deal on the fact that Guatemala will (most likely) never see train service again.
You cannot judge these societies by the standards of an Anglo derived culture. In the US and Canada we have a heritage which places great emphasis on property rights, but other cultures have other values. Latin derived cultures place great emphasis on personal attributes and much less emphasis on property rights, to the point in some societies where you own only what you can actively keep hold of.
Which approach works better, and which is most appropriate for the circumstances is not for me to say. I do point out that a cultural attribute does not exist unless it has utility in that culture.
The railroad is finished and it didn’t have to end this way. As a great fan of narrow gauge I had high hopes for this line. But it is what it is, RDC is pulling out, and the Guatemalans will have to live with the result.
I close with a quote from Mack Reynolds: “The government is the government because it serves the needs of those in power. Any time it fails to serve those needs it will be replaced.” I wish the good citizens of Guatemala all the best, and may the enjoy happiness, long life, and good fortune.
Another lesson in this for those who would try to run railroads in foreign countries is to choose your country carefully. This banana republic is behaving just like, well, a banana republic. Too bad that it cannot or will not allow its rail lines to prosper.
Dealing with a foriegn entity ie; government never gets good.
It wasn’t “short-term political thinking” that wrecked this enterprise. It was the Guatemalan government’s refusal to live up to their contractual agreements, blatant attempts at outright extortion, and greed. No business in any country can hope to succeed without rule of law. Henry Posner deserves huge credit for trying to make a go of the railroad down there, and RDC certainly deserved to win this dispute. But let this be a lesson that ANY government ANYWHERE can just as easily turn on YOU, too. They haven’t come for you yet? Can your government arbitrarily choose to honor the claims of, say, auto unions, but not a company’s shareholders? But, oh, that was a special case,right? Too big to fail. Fine. Just be on your guard. George Orwell had a sober warning about these times: some animals are created more equal than others.
Just more third world corruption entangled in violence and chaos.
Ever see those happy (dumb) couples on HGTV looking for retirement homes in Central America and Mexico?
Better off buying shares in a Unicorn ranch.
good luck on actually collecting their due!
What a pity! I had the pleasure to visit the railroad museum in Guatemala City. Small but neat! Until the early 2000’s they were running fan trips with steam.
While I fully understand RDC to get their investment back, it is nevertheless strange to see, that a country that certainly receives development aid most likely from the U.S., has to pay back such a sum.