PPPs Necessary For Industrial Development

Q: What makes Sacyr the ideal partner for developing a concession project in Mexico?

A: Our primary asset is experience. Sacyr started as a Spanish company but grew to become a global company. We have extensive understanding of local markets and are able to operate in international business environments. Here in Mexico, we bring a high level of expertise in engineering and concessional projects and a solid financial footing that reflects yearly growth. Our approach is to look for local partners and alliances, so we can take on challenges and deliver projects within budget, on time with international standards and the best quality. 

Q: What opportunity does Mexico represent for Sacyr?

A: In Latin America, we are the second-largest infrastructure developer. In 1996, we landed our first project in Chile and ever since, we have implemented long-term commitments to countries in the region. We entered Mexico in 2009 looking to introduce engineering, financing and development solutions. The country has a series of intrinsic advantages for a company like Sacyr.

Mexico is the 15th-largest global economy and continues to grow. The need for infrastructure development makes it very important for Sacyr. Since our arrival, we have participated in emblematic projects like the Guadalajara light rail, hospitals and the current expansion of terminal 2 at the AICM. The goal is to continue this track, as well as our growth.

Q: What specific concession projects are you participating in?

A: Right now, we have two concessions. One is the rehabilitation of a 183km stretch of the highway Piramides-Tulancingo-Pachuca, where we just finished two years of reconditioning and upgrading. We will be in charge of operations and maintenance for the next eight years. So far, the results are outstanding. We brought in our engineering and unique machines with the latest technology, all operated by Mexican personnel. We are using advanced technology to optimize an existing road, and reusing the material that is already there. This is a more sustainable and timely way to improve infrastructure.

The second concession is the ISSSTE hospital of Tlahuac in the southern area of Mexico City. This is the first hospital to be constructed in Mexico City in 20 years. Our goal is to open it by early summer 2020. We want to continue growing our portfolio, gaining at least another concession before 2022. This could be in other areas, such as public works and industrial development.

Q: What specific opportunities do you see in the government’s infrastructure vision?

A: The first year of this government was marked by the halting of projects that were already in place. The administration is working on its priorities and infrastructure as a way to help underdeveloped areas and how to translate these into actions. One has been the development of the southern zone of the country: including the Dos Bocas refinery, the Mayan Train and the Interoceanic Corridor. Sacyr has extensive experience in railway infrastructure globally, both for high and regular-speed projects.

We are interested in collaborating in these developments and contributing our expertise. We have participated in many prestigious infrastructure projects, such as the recent redevelopments in the Panama Canal and the Central Railway of Uruguay. Sacyr also perceives opportunities in tenders in the energy and health sectors. The president has signaled that he wants to reconvert and improve existing infrastructure in these sectors. There is a lot of health infrastructure in need of improvement. Of the 50,000 highways operated by the Ministry of Transport, there is also a significant need for upgrades and maintenance. We will be looking for potential public-private partnerships (PPP), while taking care of our own projects.

Q: What role do PPPs play in Mexico’s infrastructure developments?

A: PPPs are a tool for the government to use its resources for priority developments and to allow the private sector to invest in projects that are less urgent. They are a necessary relationship. Normally, rehabilitation of roads is something that can be done by the government, while the private sector can take care of their maintenance. The advantage of the private sector is that it has the pressure to keep an overview of the whole cycle of a project. We can move efficiently from design to construction, operation and maintenance. The separate bodies of the government do not have the same oversight nor the resources necessary to operate these roads. If they are not maintained well, the costs will be far higher to rehabilitate them. Similarly, it will cost the private sector more money to fix a project if the initial design and construction phases were not done well. The government has very good engineers but there is no single body responsible for the whole life cycle of infrastructure developments. This leads to disruptions in long-term planning and financing. PPPs, on the other hand, allow banks and funds to support financing. 

Q: What other types of services and sectors are you looking at entering here in Mexico?

A: Sacyr has the advantage of being a construction, concessions, industrial and services company, all in one. One of our available services is facility management. For example, we operate the Santiago de Chile subway and several parks and gardens in Madrid. Another area we work in is industry. We are specialized in constructing and building water treatment and desalinizing plants. We also have expertise in oil and gas infrastructure.

Sacyr is a global group that operates in almost 30 countries to improve infrastructure and services for citizens. Its objectives are innovation and international expansion in engineering and infrastructure in concessions, and services in a diversity of other projects