Private Sector Announces Third Infrastructure PackageBy María José Goytia | Fri, 04/08/2022 - 17:22
In an effort to speed up Mexico’s economic recovery and social well-being, the private sector and the federal government have prepared a third infrastructure package that seeks to boost the construction sector, mainly in the southeastern region of the country. To comply with electoral regulation, the official announcement has been postponed until mid-April.
The government and the private sector have joined efforts for the third time to create an infrastructure plan that will channel private investment to boost economic recovery. The new package represents investment of MX$70 billion (US$3.53 billion). Francisco Cervantes, President, Business Coordinating Council (CCE), confirmed the collaboration without going into detail. During the National Forum on Sustainable Infrastructure, organized by the Mexican Chamber of the Construction Industry (CMIC) in Merida, Yucatan, Cervantes affirmed that the government has delayed the official announcement due to an electoral ban on effect till the mandate referendum of April 10.
The works of the third package will focus on the Southeast. "We owe the South a lot, infrastructure there must be developed, such as roads, rails, ports and airports," said Cervantes. José Abugaber, President, CONCAMIN, agreed on the urgency of the infrastructure package, as it provides much-needed certainty to the construction industry, which has been in decline for over two years and is now challenged further by rising global inflation.
In 2020, the federal government launched two infrastructure packages funded with private investment, which included 68 projects for a total amount of MX$525 billion (US$26.4 billion). Until now, only two of those projects have been completed. Cervantes stated that the slow progress is mainly due to the adverse conditions caused by COVID-19 restrictions.
For this third infrastructure package, the official announcement was expected in Jan. 2022. However, the electoral ban has limited the government’s promotion of infrastructure projects and investment.
This infrastructure package seeks to boost one of the sectors that was hit the hardest by the pandemic. Since 2020, investment in infrastructure has dropped drastically, leaving the construction sector on a long path toward recovery. According to official data shared by the Ministry of Finance, investment in Mexico accumulated a 13.8 percent drop over the past three years, while government spending on public works had fallen by 1.6 percent over the same period.