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Infrastructure Cannot Rest Solely on PPP Scheme

Diana Muñozcano - Grupo Indi
Chief Investment Officer


Wed, 11/01/2017 - 14:38

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Q: What impact have public tenders and schemes like PPPs had on infrastructure development?

A: Infrastructure is a sector with slow mobility that requires patience and preparation. I believe that its processes have consistently improved, as PPPs have allowed a professionalization that goes beyond engineering, to a more stable financial flow that facilitates comprehensive strategic planning for the long term. Regarding the tenders, we are still trying different models to adapt to different times and contexts. There is no ideal scheme.

We need more infrastructure but not all of it can be built through PPPs, as the private sector assumes most of the risk. We try to work through unsolicited proposals (USP), which we think is an interesting way of collaborating with the public sector, even though this tool requires a high level of investment that may hinder its application. It would be very interesting to see more USPs at the state level, as local construction firms often have a more in-depth knowledge of their market needs.

Q: What strategies does Grupo Indi implement to minimize project risk?

A: I believe that a key component of our success is that we have ventured into projects as investors and not only limited our participation to construction. We are also exploring diversification by venturing into real estate. We also have tourism as a second option when the infrastructure industry decelerates. It is a sector that we know well, being the first we entered as investors, and we will continue to foster the industry given its constant growth. Also, the maritime industry promises to gain strength.

Q: What have been Grupo Indi’s most challenging projects in 2017?

A: Our most challenging project is NAICM. Also, the Circuito Interior is an interesting and complex project as it is a PPP for the first underground road in the country, built under Mexico City. It was essential that we planned the logistics well for the construction stage to ensure the least possible disruption of the daily dynamics of the area. For this project, we collaborated with La Peninsular and IDINSA. We believe that partners multiply the value that we can add to our projects, so we are willing to associate with firms that can complement our knowledge, expertise and with which we can build a relationship based on trust.

Q: How do you view your experience working at NAICM?

A: In this project we have found three main challenges given the number of players involved. First, the interoperability of all the tenders must be harmonized, as there are many local and international players involved. Second, the technical challenges are vast, given the unique and complicated soil conditions that required specific materials and engineering. Texcoco’s ground has been challenging. Third, we were responsible for taking the project to trial phase, which took us longer than expected but allowed us to test the viability of the project. We have managed to optimize our time-efficiency and make up for the delays. Our goal is to continue our participation in NAICM and I believe we can contribute most to the foundations.

Q: What imprint do you want to leave on the Mexican infrastructure industry?

A: We want to be among the top construction firms in the country and to remain present and relevant for a long time. Also, we aim to foster development through quality projects, both as investors and constructors. We have been dabbling in energy-waste management for a year. It is a slow process but we are excited to participate more in clean-energy initiatives.

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