AMLO infra program sparks hope for Mexican construction industry

Mexican President Andrés Manuel López Obrador’s (AMLO) national infrastructure program (PNI) for 2019-24 is the great hope of the private sector to get the construction industry back on track.

The president said that his infrastructure program was almost ready and that it would save national construction companies, when asked about the government’s solution to boost the flagging industry.

“Work is already underway on the infrastructure plan. It takes time, but we're already starting on [projects] that will create a lot of jobs,” AMLO said at his press conference on Thursday. 

“Also underway is a plan to carry out infrastructure, housing, highways and other works with the private sector,” he said.

CONSTRUCTION INDUSTRY IN CRISIS

Problems in the construction sector have been well noted by companies in recent years, but the reality was exposed in the 2019 national survey of construction companies that the national statistics institute (Inegi) released in August.

Construction works for both the public and private sectors recorded their lowest figures since 2007, according to this year's survey.

The figures also reveal that production, labor and salaries in the construction sector declined 10.2%, 4.2% and 4.4%, respectively, compared to last year. 

The PNI, which the private sector was invited to help prepare, has identified some 1,600 projects and is expected to be officially presented in the next couple of weeks. 

“The infrastructure plan is being supported by business association CCE and other business groups, such as [Carlos Slim’s] Grupo Carso,” the president said.

The first 100 projects will be carried out in 2020, according to press releases, but more specific details on how many there will be and when will they actually begin are still unknown. 

Earlier this month, finance minister Arturo Herrera said that the government was committed to infrastructure to counter the global economic downturn. 

Mexico has already outlined various transportation projects involving some 18bn pesos in private sector investment, which will help boost the economy. 

SEVEN PRIORITY PROJECTS FOR THE PNI 

In July, AMLO announced that the government would give priority to seven infrastructure projects, to which he would allocate some US$26.5bn. 

These projects include the estimated US$7bn construction of the Maya train, for which tenders are expected to begin in December; the US$3.9bn Felipe Ángeles international airport (AISL) at the Santa Lucía military airbase in Mexico state, under the administration of the defense ministry (Sedena); and the construction of the Dos Bocas refinery in Tabasco state, estimated to cost US$8bn.

The latter of these projects has advanced the most, the president said. 

The president also committed to building paved roads for 350 municipalities in Oaxaca and Guerrero states and restoring highways and buildings that were damaged during a 2017 earthquake.

"We began with 50 roads and now we have expanded to 50 more in Oaxaca," AMLO said on Thursday, adding that funds for the reconstruction of damaged infrastructure were delivered on Wednesday.

However, no updates have been given for works on several important projects, such as the development of a trade corridor across the Tehuantepec Isthmus, which will supposedly boost the economy of the region with 8bn pesos for the modernization of freight rail services, among other things.

Telecommunication infrastructure in the country should also be expanded as the government makes efforts to take internet services to all Mexicans. 

Although not much is known about it, AMLO said a few months ago that a public company would be created under the control of electricity utility CFE to carry out this project. 

Pictured: AMLO at the Dos Bocas refinery