Isthmus of Tehuantepec: Ambitions, Business Opportunities

The Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT), initiated under López Obrador, seeks to integrate Mexico's Southeast into the federal government's shared prosperity agenda. As President Claudia Sheinbaum continues this project, local governments must establish clear strategies to maximize its potential economic benefits.

CIIT aims to link the Pacific and Atlantic oceans, connecting Asian and European markets via a 1,200km rail line, transforming the Isthmus of Tehuantepec into a critical global trade corridor. This project, leveraging modernized ports in Coatzacoalcos and Salina Cruz, along with strategic connections to Guatemala, seeks to integrate Mexico's southeast into international commerce. Both ports have gone through upgrades for general cargo, agricultural commodities, minerals, and hydrocarbons. 

Beyond its core function as a transoceanic route, CIIT is designed to stimulate regional development through 10 interconnected Development Poles for Well-Being (PDBs), and enhanced logistical capabilities, including specialized automobile transport utilizing Supermax rail equipment and 200m car carriers.

This integration is further secured by a dedicated Marine Infantry Brigade, with over 2,400 personnel and 22 operational units, ensuring the corridor's infrastructure supports a robust and secure trade network. Additionally, CIIT's connection to Guatemala through Line K enhances regional trade, while further expansion includes additional PDBs in Teapa, Tabasco, and two in Tapachula, Chiapas, thus extending the project's economic impact.

Oaxaca’s Role in CIIT

Oaxaca experienced a 6.5% growth in 2024, ranking second nationally in economic activity. Data indicates that industrial activity in the state recorded a 15.9% increase, leading nationally in this category. In 2023, the state's contribution to the GDP was 7.6%, with the construction sector contributing 19%. The latter is seen as a result of CIIT’s construction. According to Raúl Ruiz Robles, Minister of Economic Development, State Government of Oaxaca, apart from CIIT’s direct impact, the development of social infrastructure is seen as a catalyst for progress and a profitable business for those who want to venture into it. The state projects it will need over 70,000 new homes following further development. "It is imperative to establish a comprehensive ecosystem to support the growing population. This includes executives, engineers, and other professionals attracted by CIIT. To serve this population, healthcare infrastructure, including private clinics, is required, as well as the development of educational institutions. Furthermore, attracting national and international investment demands the expansion of services such as hotels and entertainment centers," he adds.

Oaxaca will host six of the twelve CIIT’s PDBs. This infrastructure positions Oaxaca as a strategic node with access to five ports, seven international airports, and over 1,800km of railway lines. The Salina Cruz Pole is notable, with an area of 82.09ha for activities like agro-industry, machinery, and plastics production.

Estimated investment in projects related to the production of green hydrogen and ammonia in the region exceeds US$10 billion. These projects aim to boost industrial and energy development in the area, leveraging Oaxaca's infrastructure and strategic location within CIIT. "The southern and southeastern regions present significant opportunities for agro-industry, wind energy generation, and the production of agricultural and livestock products. Given this potential, we aim to attract pharmaceutical and medical device companies to the area,” Ruiz notes, adding the potential Oaxaca has in wind energy production. 

Acknowledging that the CIIT is part of a strategy to link Mexico’s industrial capabilities, Ruiz statesSouthern Mexico can contribute to federal goals. For instance, Ruiz notes that Oaxaca is a mineral abundant state, having the potential to produce important amounts of silver, graphite, and lithium, which aligns with the Olinia project to source the latter mineral for the car’s batteries. “In the semiconductor value chain, design represents 58% and manufacturing 36%. Oaxaca, with the Mixteca University and its strong base of young talent and IT companies, is well-positioned to contribute to semiconductor design,” he adds, noting the impact of including all regions in Mexico into the economic dynamism.

Chiapas Role in CIIT 

Luis Pedrero, Minister of Economic Development and Labor, State Government of Chiapas, says that while Chiapas was not initially included in the original CIIT draft, the state's diverse opportunities have prompted local government efforts to actively engage in the project and attract company investments. He highlights Chiapas' significant electricity generation capacity, specifically its hydroelectric production, which accounts for over 70% of Mexico's total hydroelectric energy.

Pedrero notes the state's capabilities in the agribusiness sector as it boasts significant production volumes across a diverse range of agricultural products, including leading national outputs in bananas, tilapia, and coffee, alongside strong positions in mango, sugarcane, and cacao. Additionally, he emphasizes the pharmaceutical industry's potential in Chiapas, particularly through an export model targeting the Central American market. While this market does not possess the same purchasing power as the United States, its geographical proximity and population of over 60 million inhabitants present a compelling opportunity.

Chiapas is pursuing productive projects that leverage its strategic link with Guatemala. While current exports from the state amount to roughly 100 containers, demanding reliance on a single cabotage vessel, the saturation of Guatemala's Puerto Quetzal offers a strategic advantage. “Our strategy involves engaging shipping lines that serve Quetzal to consider Tapachula as an alternative. This presents a promising logistical solution for short-term cargo transport between the ports. Furthermore, in the medium term, this development could encourage Guatemalan industries to shift their production to Mexico, a move supported by CIIT's ongoing port development in Chiapas,” he explains.