Experience Invaluable for Future InvestmentTue, 11/01/2016 - 12:47
Q: Why is Isolux Corsán focused on participating in Mexico’s transmission lines?
A: Private participation in transmission lines is our focus right now because it is something we know well in Mexico, this type of investment for private companies is new here and we have the experience. Renewable energy is also something in which we are very strong outside of Mexico. Here, we have been involved in the wind sector but the boom is now in solar power. We also are heavily involved in thermal energy because the Energy Reform is focused on pipelines, although gas will still have a vital role in the future. We know how CFE works and we are trying to focus more on private companies. We are also participating in bids for highways and are interested in hospitals, prisons and buildings in the water sector.
In the past, we were a Spanish multinational company but we are now a global company with headquarters in Madrid, even though Spain represents only 10 percent of our business. Around 50 percent of our operations are carried out in Latin America with the five main global subsidiaries being Mexico, Argentina, Brazil, Algeria and India.
Q: How can the private sector bridge the gap between infrastructure needs and the public sector’s ability to deliver?
A: In one aspect, the balance of power is changing with the Energy Reform and it seems the private sector will have a bigger role. This is what we are trying to focus on as the market will be opening to other private energy generators. CFE will continue to be important in the power generator sector but I believe that the private clients will be the main players in the future.
It seems renewable energy power is going to be increasingly important in Mexico. In the past, we were focused on thermal and petrol power but moving forward we will turn our attention to private generators and renewable power.
Q: How much further must Mexico go to alleviate the problems that hinder companies from choosing to work in the country?
A: Mexico has to go through the same challenges other countries have in the past and we can learn from them. Having the experience of working in Mexico and a team devoted to providing security make safety challenges manageable. Another challenge is convincing private investors to participate in the Mexican power sector as it is new for them. We remain confident because many companies are interested in coming to Mexico. As a company that has been successful here for many years in the electrical industry, we provide reliability to investors.
Some hesitate to back new investments like transmission lines, which used to be a monopoly. We are in talks with some companies but we are waiting to receive the tender documents for the lines. There are two projects at the moment, one of which is a US$1.2 billion investment that will connect Sonora to Baja California. Private companies are worried about the legal framework, tender documents and repayment details among other aspects of the investment because it has not yet been made clear.
Q: To what extent can Isolux Corsán have an advisory role in the government’s decision-making?
A: We are not official advisers but we have a lot of experience. We have 5,000km of high-voltage transmission lines in Brazil and transmission line concessions in Peru, the US and India. About nine months ago we began conversations with CFE about our experience in other markets and provided them with advice on how similar countries have handled the same projects.
We began working in Mexico many years ago, which provided us with in-depth knowledge of the market while some other companies may have been focusing on other local markets. Because of this experience we are well-established in Mexico. We are a global contractor but we have our own teams and people here that help us be more competitive. We may have not been the first contractor in Mexico but we must be one of the first for transmission lines.