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Infrastructure Plan to be Unveiled in October: AMLO, CEE and CNM

By Alessa Flores | Thu, 09/17/2020 - 14:55

Infrastructure investment is strategic and a priority issue for Mexico because it represents the means to generate development and economic growth. It can also support the development of the country in an inclusive manner and provide opportunities for lagging regions in telecommunications, roads, railroads and suburban trains, ports, airways and suburban trains. Given the economic impact of COVID-19 in Mexico, the release of the Infrastructure Plan for 2021 has become a major issue.

Earlier this week, at his morning conference, President Andrés Manuel López Obrador, accompanied by the leaders of the Business Coordinating Council (CCE) and the Mexican Business Council (CMN), announced that in the first week of October, the infrastructure plan involving the federal government and the private sector will be revealed.

This document was to be presented in February 2020 but was postponed to October. However, in November 2019 the National Agreement on Private Sector Infrastructure Investment was released with the purpose of "being a tool to facilitate and accelerate the implementation of projects that could contribute to the growth and development of the country," according to the National Development Plan. This step symbolized the Mexican government's commitment to boost private investment and consisted of an initial package of 147 projects with a total private investment of MX$859,022 million (US$42,951 million).

Furthermore, one of the objectives was to achieve an annual infrastructure investment of 5 percent of the GDP, to which the 147 elected projects by the corporate sector are expected to contribute more than 4 percent to GDP growth, based on the federal government's objectives. It is expected that 41 projects will be developed from the initial package between 2021 and 2022, focusing on the transport sector (27), airports (12), roads (nine), water and sanitation (eight), ports (four), tourism (three), telecommunications (two), railroads and suburban railways (two), and one last project related to Mexico's national stadium. 

Although the budget will be allocated to several projects, three emblematic programs stand out: the train in the Yucatan peninsula, the reconversion of the Santa Lucia military base and the Tabasco fossil fuel refinery, explains a note by El Economista. The Mayan Train is López Obrador's main tourism and socio-economic development infrastructure project, as it proposes to connect the main cities and tourist areas of the Yucatan peninsula. Innovation lies in the fact that the project promotes a tourism scheme in which visitors can tour the region's communities and not focus on a single location. This project, therefore, aims to link large tourist centers from Cancun to Palenque, passing through Izamal, Merida, Playa del Carmen, Tulum, Bacalar, Calakmul, Tenosique and others.

According to the Mexican government, the other emblematic project is the New Santa Lucia Airport, located in Zumpango, State of Mexico, just 45km from the Benito Juárez International Airport (AICM) in Mexico City. The new Felipe Ángeles International Airport will become part of an integral airport network in Mexico City, together with the AICM and Toluca International Airport. To date, according to López Obrador and a note in El Economista, the project has registered an advance of 25 percent by July 31. At the end of 1Q20, the physical advance of the terminal was 7 percent and three months later it rose to 23 percent. Construction of the Felipe Ángeles International Airport (AIFA) began on Oct. 17, 2019 and is expected to be completed by March 21, 2022.

According to SENER and the Mexican government, the last emblematic project for this period is the Dos Bocas Refinery in Tabasco, which aims to increase the country's production of higher value-added products, take care of trade balances and promote economic and social development in southeastern Mexico. SENER revealed that in June, a year after starting the construction of the project, 34,042 jobs had been generated (8,019 direct and 26,023 indirect), together with the signing of collaboration and technical cooperation agreements with the Federal Superior Audit Office, Financial Intelligence Unit (IUF) and the Internal Audit Office of PEMEX to promote accountability and transparency in the project.

In an interview with Carlos Salazar, President of the Business Coordinator Council (CCE) and Antonio del Valle, President of the Mexican Business Council (CMN), El Universal revealed that the infrastructure plan "is progressing very well" and that in the face of the pandemic the panorama has changed. "Many things have to be rewritten practically from scratch and we are working together, which is what is important. We have all the potential to move forward; it is a matter of agreeing," explained del Valle.

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Alessa Flores Alessa Flores Senior Journalist and Industry Analyst