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Weekly Roundups

The Week in Infrastructure: Mayan Train Publicly Funded

By Pedro Alcalá | Fri, 12/20/2019 - 17:26

During his morning press conference, President Andrés Manuel López Obrador announced that the federal government will cover the entire construction of the Mayan Train. The president specified that this expenditure would represent no further debt on the federal government’s balance sheet.

Of the over US$6 billion that the project is projected to require, the president claimed to have “already secured over US$3 billion from now to 2024.” He then declared that the rest would be taken from the federal budget’s expected increases from resource allocations such as taxes directed at tourists, which according to the president “were usually spent on government promotional campaigns.”

Although PPPs were initially considered to cover the cost of this infrastructural investment, the president decided that they were “too expensive” and that they created “too heavy a debt burden for subsequent administrations.”  

Nuevo Leon Pioneers New Public Works Monitoring System 

State authorities have announced that starting on March 31, 2020, Nuevo Leon will begin publishing all information related to contracting for public works, including planning, development, start dates and operation, according to an international standard of open public contracting. It will be the first entity in Mexico to adopt this system.

The software to access the information will be free to use for all other federal entities. This initiative is meant to battle corruption under the premise that said ailment has a tendency to appear in public works. 

All Mexico City Projects Will Now Include Public Polling Phase

At a press conference last Tuesday, Mexico City Mayor Claudia Sheinbaum stated that, beginning in 2020, all large scale housing and commercial developments, such as malls and towers over 40 floors high, will need to go through an initial polling phase to determine their full social and environmental impact. 

Although this polling phase will not necessarily have to involve a vote, developers will need to prove that they engaged with communities to make sure their projects meet the needs of the people around their project’s site. 

S&P Maintains Mexico Rating 

Credit rating agency S&P has decided to close the year without changing its sovereign rating of “BBB+” for Mexico, followed by a “negative forecast.” Its decision to not downgrade the rating further is based on the positive potential offered by the National Infrastructure Plan and USMCA’s successful negotiation.

However, agency representatives also pointed out that should there be no visible signs of change as a result of these two initiatives, S&P will find itself in the unfortunate position of having to downgrade Mexico’s sovereign credit rating.  

Construction Sector Falls for 16 Straight Months

October figures show Mexico’s construction sector has gone through a steady contraction for 16 straight months. Productivity of construction companies has also fallen 11.1 percent in one year. Infrastructure stimulus are expected to reverse this trend in 2020.

(Image courtesy of expansion.mx )

Pedro Alcalá Pedro Alcalá Senior Journalist & Industry Analyst