Progress on Infrastructure Packages Sluggish: CMICBy Cas Biekmann | Fri, 12/31/2021 - 12:34
Mexico’s first two government-backed infrastructure packages based on the 2020-2024 national infrastructure program (PNI) have an advancement of only 30 percent, according to the country’s construction industry chamber. What is more, a promised third package remains to be revealed.
The two previous packages, featuring 68 projects to be constructed with private investment totaling US$25,6 billion were already released in 2020. The first package was released back in November 2019, which was made up of 147 projects with an investment totaling US$43 billion (MX$859 billion pesos). The second package was released in November of last year, which brought together 29 projects with a combined investment of US$11.4 billion (MX$228 billion pesos),
Nevertheless, these projects that were meant to spur an economic reactivation after the COVID-19 pandemic’s first lockdowns have not made much progress, said President of the Mexican Chamber of the Construction Industry (CMIC), Francisco Solares, to Milenio. “These packages were announced without having the projects developed 100 percent, these include executive projects and financial feasibility set,” explained Solares, adding that previous government administrations played an important part in these issues as well. The projects that added to the 30 percent completion figure were already in advanced stages of development and construction, reported the CMIC.
Other challenges that have halted the progress of these landmark infrastructure projects include a reform on subcontracting law sent by the Ministry of Labor. Companies that win tenders often subcontract people to get specialized work done, with such contracts ranging from hundreds to thousands.
The promised third package has not been announced yet either. “We have had a lot of difficulty finding information on the progress of these projects,” said Solares, adding that the government did confirm it was already working on the packages. In July 2021, President Andres Manuel López Obrador announced the third package to reporters: “This third infrastructure package will be announced soon at the national [presidential] palace,” he said. “The will to work together, to promote private investment, which is fundamental, was reaffirmed. The country cannot develop with just public investment, private investment is required, and a solid agreement was reached. It was a friendly meeting, there were no differences, no confrontations,” he added later.
Solares explained that the third package would include projects such as roads and water infrastructure, which he was told during a “dialogue with engineers” in July. The third package would feature 10 to 15 projects and aims to capture US$3.4 billion in investment.