A sectoral overview
Infrastructure development crosses a broad range of sectors in Mexico. In the next two pages we take a look at the main developments in transport, water and rural infrastructure.
July 19th, 2012
In terms of volume and value highways have been the most successful aspect of recent infrastructure development. “We will have built or modernised over 21,000km of highways and rural roads by December,” said Fausto Barajas, Undersecretary of Infrastructure. The construction of arterial roads has ensured both coast-to-coast and north to south connection. Flagship projects include the Durango-Mazatlan highway that will connect the Gulf of Mexico with the Pacific Ocean and the US$519mn Arco Norte highway that links the four states to the north of Mexico City.
In a bid to solidify its position as a global strategic shipping hub, Mexico has invested some US$2.97bn in the construction and expansion of its 16 key ports. Port development has provided ample investment opportunities for private companies, who currently account for 70 per cent of total investment. Projects include the US$2.52bn liquefied natural gas terminal in the Pacific port of Manzanillo and the upcoming tender for a specialised car terminal in Lazaro Cardenas port that will service the country’s thriving automotive industry.
Airport infrastructure has also expanded with the airport network “showing a 33 per cent growth compared with the 2001-2005 period,” said Felipe Duarte, Undersecretary of Transport. Three private companies (OMA, Asur and GAP) currently dominate the market, holding concessions for a combined 34 airports nationwide. Between 2006 and 2010 OMA invested US$257mn in projects such as the expansion of Monterrey’s Terminal B, “the most modern terminal in Mexico,” according to Porfirio Gonzalez, CEO of the company. Other significant projects include a second runway in the tourist hotspot Cancun and additional terminal buildings at Mexico City airport.
Rail infrastructure has largely been neglected in recent years although interest in the sector is expected to pick up. Infrastructure is currently limited to cargo transport, predominantly in the hands of private concession holders, but at least three high-speed inter-state passenger train projects are in the pipeline. The key project of note is the US$12.2mn international rail bridge linking Mexico’s Matamoros and Brownsville in the US state of Texas. The project, due to wrap up this year, is the first international rail bridge built in Mexico in over a century.
Calls for sustainable public transport have grown increasingly loud over the last two years. Dependence on the car as the main form of transport is widespread through much of Mexico but a wave of bus rapid transit (BRT) systems is clawing back the difference. Mexico City now has four BRT lines and most state capitals have at least one line slated for development. The capital is home to one of the world’s busiest metro systems with an average five million passengers per day. At a cost of US$1.48bn, this year will see completion of a new metro line, making it the biggest urban transport project in recent years. An innovative bicycle scheme, similar to London’s “Boris Bikes” has also proved popular in Mexico City.
Given the size and diversity of Mexico’s geography, the water challenges vary between regions. The north is currently experiencing the worst drought in history while heavy flooding often damages infrastructure in the south. Despite being built on a lake, the Mexico City metropolitan area’s scant water resources are under huge strain from its 18mn residents. Big challenges have required big solutions and this year sees the completion of two of the largest water projects in Mexican history. The US$710mn Atotonilco wastewater treatment plant will treat 60 per cent of Mexico City’s wastewater while the world’s largest drainage tunnel, the capital’s Emisor Oriente, is expected to cost US$1.26bn.
Road construction has gone some way to improve access to hospitals and schools in rural areas and a national programme to expand access to broadband internet has resulted in the construction of several community connection centres. Development bank Banobras’s FAIS programme also provides loans to municipal governments to finance basic infrastructure programmes such as paving, lighting, water and sanitation in marginalised areas. Most recently, Banobras opened a US$54.1mn credit line for Oaxaca state municipal governments.