MEXICO CITY (Reuters) - Mexico's antitrust authority announced on Wednesday an investigation into the country's freight rail transportation market, dominated by Canadian Pacific Kansas City (CPKC) and Grupo Mexico's transport unit, amid government plans to build out railway infrastructure. 

Without mentioning the companies by name, the antitrust watchdog Cofece said that there were elements that suggest the "absence of competitive conditions" in the industry, which moves a quarter of the total merchandise transported by land.

Canadian Pacific Kansas City and Grupo Mexico Transportes did not immediately respond to a Reuters request for comment.

In a 2021 study, Cofece said that the country's railroads were nearly entirely managed by three groups: Grupo Mexico held 56% alongside its Ferromex and Ferrosur units; Kansas City Southern (now called CPKC) had 24%, and the state-owned Ferrocarril del Istmo had 12%.

Cofece said that the investigation period will take between 30 days and 120 business days, and may be extended up to two times.

In November, the government published a decree that gives preference to trains transporting passengers over those transporting freight on railways under concession.

Freight train companies have until Jan. 15, 2024, to submit proposals of how their railways can be adapted to offer passenger transportation.

(Reporting by Noé Torres; Editing by Alistair Bell)