Interoceanic Corridor Will Need 10 Years to Scale Up

The Interoceanic Corridor of the Isthmus of Tehuantepec is positioned to boost Mexico’s logistic capabilities similar to major players like Panama. However, the real estate consultancy agency Softec says that its benefits may only become tangible in the long term since the project needs around a decade to completely mature.

In an interview with BNAmericas, Gene Towle, Executive Partner, Softec, said that the executive project makes sense to develop for Mexico. However, he doubts whether Mexico could reap the benefits if the project is not fully developed. According to Towle, the corridor would need at least 10 years to scale up.

The development has been inconsistent, especially regarding the construction times. According to the railway developer FIT, the railroad reported a 64.4 percent progress in October 2022, however, the federal government still says that the project must be inaugurated this year. The works for the construction of the rail line started in 2020, but its terminals and industrial parks have not yet been tendered. 

According to Softec, even if the industrial parks were tendered this year, investors would not necessarily show interest since the connections are not ready and the project is not operational yet. “It is a process that takes time. It is not something one announces and then, the next day, you are already constructing industrial buildings. To build an industrial park, the first issue one must tackle is establishing the infrastructure, water, light and access,” Towle said. 

On Nov. 18, 2022, MBN reported that the federal government announced an injection of US$ 394 million to conclude the project’s first stage, including the development of breakwaters, docks and rail lines. according to Daniel Gutiérrez, MORENA Senator and Finances Coordinator of the Chamber of Deputies, the first stage would be ready by 2023. 

The federal government expects this project to be a success as it aims to compete with important logistic hubs in the region like the Panama Canal. According to Eduardo Romero, Coordinator for Industrial Sector Development and Strategy, the interoceanic Corridor, the project will be able to move over 1.4 million containers per year. Romero said that the project will contribute 1.6 percent of the GDP by 2050, attract over US$50 billion in investments and create more than 500,000 direct jobs since it will be an “investment magnet” because of the tax incentives it will offer.

The Interoceanic Corridor will connect Salina Cruz port in Oaxaca with Coatzacoalcos port in Veracruz via a 303km railway with connections with highways, the airports of Minatitlan, Ixtepec and Huatulco, as well as 10 industrial parks. The corridor will also feature a gas pipeline and optic fiber network.