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Analysis

Mayan Train: 2020 Wrap-Up

By Pedro Alcalá | Thu, 12/10/2020 - 11:27

This year, the Mayan Train has seen it all, and so has the Mexican construction sector. Despite cancellations and delays, 2020 has not diverted the train off its tracks. The Mayan Train, considered a flagship infrastructure project for the López Obrador administration, has made great progress in its development phase, both in its contracting and initial construction phases. The project will play a key role in the development of the country’s southeastern states, according to President López Obrador.

Enthusiasm and criticism for this project has been expressed by a number of MBN interviewees and contributors immediately following this president’s election. Guillermo Ortiz, Director General of civil engineering firm Consorcio IUYET, said in 2018 the Mayan Train would be the biggest infrastructure initiative in the country, crossing five states. “We would like to take part in this project. So far, we know that it will reuse part of the ancient Palenque Rail, while another segment will cross Tulum and will be available for both passengers and freight,” Ortiz said. However, even back then, Ortiz was already gauging the challenges ahead. “This project is a challenge given the geography of the areas it will straddle, full of cenotes and underground rivers. This would mean stringent due diligence in terms of rights of way and for social aspects with so many communities and ejidos involved. It is also of utmost importance to highlight the cost-effectiveness of carrying out this project with Mexican infrastructure companies as we can offer a more competitive price.” Interestingly enough, Consorcio IUYET was also pursuing an alliance at the time with CAABSA, one of the companies that would end up contesting the results of one of the Mayan Train’s bidding rounds, as reported here by El Economista.

Other observers were less convinced that the project was the best idea at this time. Ricardo Schöndube, Managing Partner of Schöndube Abogados, a firm specialized in the Yucatan peninsula’s hospitality and tourism sector, said to MBN back in 2019 that the Mayan Train was directly linked to the current needs of Cancun and the Riviera Maya. “Before the project is done, we need to clarify the objective of the train, including how many people are going to benefit, which places it will impact that today cannot be reached by car or bus and so on. I am in favor of the construction of the Mayan Train but at the same time I think that the government should consider other priorities before constructing it.”

One year ago, FONATUR concluded the project’s basic engineering study. This set the stage for 2020 to get the ball rolling with this project in earnest. In March of this year Leopoldo Zambonino, Director General of Mextypsa said the Mayan Train was among the Top 3 projects for the group. “We would like the project to move faster. Though the project has been on the table for several months, we are still in the structuring process. We have had many meetings with different government entities and the project finally released some of the bidding processes. The project is a-go. However, it is going slower than what it seems in the media, especially compared to Santa Lucia and Dos Bocas. Regardless, we are advancing at a safe pace with processes meticulously done,” he said. Even to a rail development expert like Zambonino, the scale and scope of the project was amazing and yet, problematic. “There is no other project like the Mayan Train. In other countries, there have been railways that run 400km but a 1,600km train has never been done. Moreover, the project is located in a karstic region that poses several difficulties regarding construction, in addition to the environmental and indigenous challenges. When you add all these to a political will to finish the project during the current administration, we can say there is no comparable project.”

In March, difficulties and challenges were becoming more pronounced, as the Mexican government began adopting stringent health measures in response to the onsetting COVID-19 pandemic. MBN reported on President López Obrador’s intentions to make sure that his administration’s flagship projects would be unaffected. These intentions appeared to be confirmed when the submitted bids for the construction of the train’s first segment were announced on April 2, along with an announcement the next day of a pre-criteria for the 2021 federal budget that greatly increased infrastructure spending, while keeping health spending more or less flat despite the ongoing global pandemic. By the end of the first half of April, the administration’s flagship infrastructure projects had been declared “essential economic activities” by presidential decree, not to be interrupted by the pandemic, despite a judge’s challenge. All the bids for the construction of the train’s first and second segments had been published by April 15. Participating companies expressing interest in the train’s construction included international consortiums and recognizable national players such as ICA and Carlos Slim’s CICSA. 

The winner of the bidding round for the construction of the train’s first segment was announced at the end of April: the Lumat consortium, formed by the union of Mota Engil Mexico, China Communications Construction Company, Gavil Ingeniería, Eyasa and Grupo Cosh. Controversy followed this announcement, given the complicated pasts of the contractors involved.  Nevertheless, FONATUR announced the bidding round winners for the construction of the second segment, Slim’s consortium formed by CICSA and FCC Construcción, a choice later criticized by the media and then defended by Slim himself, along with the third segment winners in May, the consortium formed by Construcciones Urales, GAMI Ingeniería e Instalaciones and Azvi. Throughout this period, the project’s critics included judges, governors and business leaders. However, the opportunities and benefits this project was creating for southern states also began to shine, including the agricultural revolution that the project could represent. The train’s fourth segment was adjudicated to ICA, since it would run alongside a highway that the company already operated. Construction work officially kicked off in the beginning of June. The fact that the project’s full environmental impact report was not ready by then brought about a fresh batch of criticisms. 

The project began to develop fast and became an apparent key factor in the country’s economic agenda. As a result, major financial institutions such as Citibanamex and Moody’s, along with company directors, began to share favorable opinions regarding the project. “We do not have a political stance on this project. However, we would like to help to support local communities and act as a bridge with authorities. We have a pending meeting with government officials of the Mayan Train project. There is a great deal of work to do, particularly with the ejidos of the Yucatan Peninsula, in Campeche and Quintana Roo, mostly. Ultimately, the ejidos are the owners of the land and the forest is a resource of the land,” said Edgar González Godoy, Country Director of the Rainforest Alliance.

The bidding round for the construction of the train’s fifth segment ended up being cancelled in September and divided into various subsegments that will be negotiated and defined at a later date. While many could consider this a setback, it reveals the larger ambitions the president has for this area, which include the lucrative and strategic Riviera Maya tourism corridor and the construction of a new airport for the city of Tulum. That only leaves the sixth segment to build, which will easily turn out to be the most controversial of all segments because it travels through the Calakmul biosphere reserve. The president clearly desires to leave this political battle for 2021.  Patricio Cal y Mayor, Chairman of the Board at Cal y Mayor, said to MBN this is the administration’s largest transportation project

Controversy, however, is far from over. In October, Guillermo Ortiz, presented a more ominously critical vision of the project. “Unfortunately, in Mexico, politics trumps engineering. Most of Mexico’s largest infrastructure projects can get more political than technical. A clear example is the Mayan Train, which is being built by FONATUR even though SCT has a specific railway department. The expected date of the train to be finished is 2022, but again politics come into play.”

The data used in this article was sourced from:  
MBN, El Economista
Photo by:   FONATUR
Pedro Alcalá Pedro Alcalá Journalist and Industry Analyst