DALLAS — Construction is expected to begin in June on a $400 million Union Pacific rail hub in Santa Teresa, N.M., financed through a public-private partnership, after New Mexico Gov. Susana Martinez signed four bills related to the project.

The new multi-modal facility has been on the drawing board for years, promoted vigorously by Martinez’s predecessor, Bill Richardson. The hub for rail and truck shipments on the outskirts of El Paso, Texas, is to expand the capacity of the region to handle cargo between the U.S. and Mexico under the North American Free Trade Agreement.

With Union Pacific’s rail connections to the Port of Los Angeles, the new hub pre-empts proposals to build a competing inland port in Arizona. It also makes the El Paso region more competitive with major crossing points on the lower Rio Grande, particularly Laredo and Brownsville in Texas, which have recently added bond-financed toll bridges to handle increased border traffic.

“By eliminating New Mexico’s competitive disadvantage with neighboring states, we can create a better environment for economic growth,” Martinez said Tuesday in Santa Teresa, where she signed House bills 24, 322, and 523, and Senate Bill 179.

HB 523 and SB 179 exempt Union Pacific from severance taxes on locomotive fuel. HB 24 authorizes special permits for overweight trucks in the region. HB 322 creates a special project fund for the New Mexico Border Authority that can be used to back bonds for various projects related to the new hub, such as inspection stations, safety and law enforcement facilities, and infrastructure.

The bill does not appropriate money from the state’s general fund, but authorizes the new fund and specifies how revenue collected in excess of debt obligations will be allocated between the project fund and the operating fund for the Border Authority. Currently, all of the authority’s revenues are allocated to operations. The new law allocates 15% of revenues to match private contributions and government grants to finance the infrastructure.

“Promoting public-private partnerships will allow the Border Authority to maximize limited funds that are important for the development of New Mexico’s border economy,” Martinez said.

The new facility will be just west of the Santa Teresa Airport on 2,200 acres and will include fueling facilities, crew change buildings, an intermodal yard, and an intermodal ramp with an annual lift capacity of up to 250,000 containers.

Construction of the facility is part of Union Pacific’s plan to invest about $3.2 billion in 2011 to upgrade its 32,000-mile network. The railroad, which serves the western United States, plans to keep its El Paso facilities, including a small intermodal freight yard. But some of its 400 El Paso jobs will eventually be shifted to Santa Teresa, according to officials. The landlocked El Paso yards are at their capacity limits now, they said.

In Mexico, the state of Chihuahua is considering plans to move its current rail bridge between Juarez and downtown El Paso to Santa Teresa. Transportation officials are also considering construction of new bridges to ease the chokepoints for rail shipments across the Rio Grande.

Chihuahua Gov. César Duarte said last month that money is available to begin at least one of seven proposed bridges in Juárez.

Building any trans-border rail loop is a complex process that requires approval from government agencies and from the railroads Ferromex of Mexico, Burlington Northern Santa Fe, and Union Pacific.

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