Mexican business leaders demand postponement of US$3bn Monterrey aqueduct

Mexican employers' federation Coparmex has called on the government of Nuevo León state to postpone for 10 months construction of the Monterrey VI aqueduct, due to more than a dozen alleged irregularities.

"One of the main irregularities is that this aqueduct would cost around 47bn pesos [US$3.1bn], up from 14bn pesos scheduled originally," the president of Coparmex Nuevo León, Alberto Fernández Martínez, told reporters in a press conference in the city of Monterrey on Wednesday.

During the press conference, the Coparmex Nuevo León disclosed a statement highlighting what it said were 15 irregularities in the aqueduct.

One of the main alleged irregularities is that "there is a total lack of transparency in this project, and it has not been shown that there is no conflict of interest in hiring Grupo Higa, a construction company shrouded in suspicion of corruption," according to Fernández Martínez.

President Enrique Peña Nieto has been drawn into a corruption scandal stemming from the now suspended Mexico City-Querétaro high speed rail project.

The government rescinded the original tender for the train project, awarded in November last year, after it emerged that one of the companies in the winning consortium, Grupo Higa, held title to a home owned by first lady Angélica Rivera.

Later reports revealed ties between the same company and finance minister Luis Videgaray Caso.

HIGA AND ICA

A five-company consortium won the 30-year concession in September last year to build the Monterrey VI aqueduct.

The main companies involved are Concretos y Obra Civil del Pacífico (37.75 %), a subsidiary of Grupo Higa, and Controladora de Operaciones de Infraestructura (37.75%), a subsidiary of Empresas ICA.

Grupo Higa is owned by Juan Armando Hinojosa, whose companies won hundreds of millions of dollars worth of public works projects during Enrique Peña Nieto's time as governor of Mexico state and during his current federal administration.

WATER PIPELINE

The 372km, US$1.2bn aqueduct - being developed under a PPP model – will transport 5m3/s of water from the Pánuco river basin in San Luis Potosí state to Monterrey in Nuevo León state.

"We want to be sure if there is water or not" in that part of the country, said Fernández Martínez.

Coparmex claimed that nine of the 15 irregularities are related to the environmental impact assessment, which has "omissions, errors and serious inaccuracies, and should not have been authorized by Mexico's environment and natural resources ministry Semarnat."