Mexican infrastructure projects trigger public debate | Business| Economy and finance news from a German perspective | DW | 23.08.2018
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Mexican infrastructure projects trigger public debate

Mexico's incoming president wants to make a big splash with a railway line to bring development to the south. But many huge projects across the nation have failed as Andreas Knobloch reports from Mexico City.

Although not officially taking office until December 1, Mexico's newly-elected president Andrés Manuel López Obrador is already leaving his mark on the political agenda in the Latin American country.

Read more: Lopez Obrador's policies for Mexico remain an enigma postelection

Just a few days ago, the man — who is commonly referred to as AMLO, denoting the initials of his name — lifted the veil on the first major infrastructure project he wants to launch during his term.

The "Tren Maya," or "Maya Train," is an initiative to build a 1,500-kilometer (932-mile) railway line to link Mexico's economically depressed southeastern regions with the more prosperous parts in the north of the country. Part of efforts to boost tourism and goods transportation, the intention is for the new railway to connect Mexico's famous destinations Cancún, Palenque and Chichen Itzá with each other.

Read more: Opinion: AMLO's election a turning point in Mexico's history

The costs of the project are estimated to lie somewhere between $6 billion and $8 billion (€5.19 billion and €6.92 billion), but only a small part of the funding would come from government tax income, including the $367 million Mexico derives from tourism annually, the Mexican president said as he presented the project to the public.

"Since those [means] won't be enough, we are going to launch a tender for a public-private partnership enterprise," AMLO announced, adding that three quarters of the funding was expected to be raised from private investors.

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Scarce funds

Mexico's tourism industry officials aren't happy with the plan, criticizing the fact that the government intends to use scarce funds devoted to tourism development for the project. The suggested private-public partnership, however, is more to their liking, and they have proposed additional ways of securing funding such as a public listing of the company and direct investment from abroad.

Industry representatives have also raised concerns about possible conflicts over land ownership titles and environmental issues that might crop up as a result of the construction process.

AMLO's Maya Train is not the first major rail project to be built on Mexico's Yucatán peninsula. At the end of 2012, his predecessor Enrique Pena Nieto proposed a similar rail line stretching for 278 kilometers and linking the Mexican states of Quintana Roo and Yucatán.

But Pena Nieto had to drop the plan because of budget constraints, sharing the fate of a high-speed railway connection between Mexico City and Queretaro, which was to be built by a Chinese consortium.

Symbols of progress

When the Nieto government scrapped the multi-billion-dollar contract with the Chinese in 2014, the move drew much criticism from Beijing which described the decision as "unprecedented." At the time, the Mexican public learned of "irregularities and conflicts of interests" that allegedly accompanied the tendering process for the contract. 

Although the Mexican president vowed to press ahead with the project, a new public tender never happened, and all Pena Nieto's ambitious railway plans ultimately went up in smoke.

Mexico's railways have been a symbol of the progress made by the country since the Mexican Revolution of the early 20th century. But many of them have simply vanished since the government privatized rail networks and operators in 1995. Only a few goods trains have remained in operation. Nonetheless, it hasn't stopped AMLO from making a rail project his government's first major infrastructure project.

Watch video 01:35

Riding the 'Beast'

Meanwhile, another massive infrastructure project could be about to meet a premature end: the new airport in Mexico City, which was designed by star architect Norman Foster.

During his election campaign, AMLO derided the building of the new airport — already well on the way to completion — as a "symbol of corruption" and promoted the addition of two runways to the existing Santa Lucía military base to the north of Mexico City as a preferred alternative project.

His main issues with the Foster project were the high costs ($13 billion, with around 30 percent of that public money), as well as concerns over irregularities in the awarding of construction-related contracts.

Norman Foster baut Flughafen für Mexiko-Stadt (picture-alliance/dpa)

Mexico City's new airport, currently being built to the northeast of the capital, is considered to be a showpiece project of the outgoing government.

On to a referendum

Local residents have concerns over the potential impact the development will have on the environment but on the more business-oriented side of things, there was a fiercely negative reaction when construction was halted. Still a candidate at that time, AMLO rowed back a little, saying he would consider the merit of the projects carefully before making any final decisions as president.

For both projects — the Texcoco airport and the Santa Lucía base — there are valid arguments for and against. Engineers and civil society groups will present their own views to the president-elect's transition team over the coming weeks.

Then, at the end of October, the people will have the final say on the competing projects in a referendum which will take place one month before AMLO officially takes office.

Mexiko PK Gewählter Präsident Lopez Obrador über neuen Flughafen In Mexiko-Stadt (Getty Images/AFP/P. Pardo)

In August, Mexico's future president AMLO (left) and his infrastructure coordinator Alfonso Romo) presented a technical report on the new airport. They called on the Mexican people to help solve "this complicated issue that we have inherited" during the upcoming referendum.

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