LatinFinance - March/April 2015 - 44

MEXICO
INFRASTRUCTURE

Mexico's infrastructure plan is set to demand more private
sector participation than ever before. Construction companies are
positioning for the opportunities. By Patrick Ferguson

Ready for take-off

44 L ATINFINA NCE.COM - March/April 2015

©REUTERS

A

new airport for
Mexico City has been on the table for more
than two decades. Under former president
Vicente Fox, the Mexico City Airport Group,
GACM, started construction on an airport
just outside the city in 2002, but machetewielding farmers refused to give up the
communal farm land and thwarted the
project.
Under Fox's successor, Felipe Calderón,
the airport added another terminal in
2007 to ease congestion at Latin America's
second-largest airport. It quickly filled up.
In 2012, 28.7 million passengers passed
through its gates, pushing the airport to
capacity. The following year, that figure had
jumped to 31.5 million.
Now, GACM is having more luck, getting
the green-light in January for what is
expected to be the most sustainable airport
in the world. The facility, designed by
architects Foster & Partners and Fernando
Romero, will use solar power and capture
rain water and will be the world's biggest
gridshell structure.
Some 50 million passengers will be able
to fly in and out each year after its scheduled
completion in 2020, and capacity extensions
are available to bring that to as many as 120
million. Its three runways are being built on
the same land the farmers defended more
than a decade ago.
The airport is the flagship project
of President Enrique Peña Nieto's
infrastructure plan, which calls for more
than 7.7 trillion pesos ($511.1 billion) to
be invested in Mexico's ports, highways,

GETTING BIGGER: Mexico City's airport is a
central project in the country's infrastructure program

pipelines, airports, telecommunications
services and railroads over the next four
years.
The cost is almost double what the
president announced when he took office
in December 2012, and four times as big as
the previous administration's goal.
Peña Nieto unveiled the beefed-up plan
in April 2014, saying the country needed
infrastructure development to accompany
his administration's reforms, including
a revamping of Mexico's public-private
partnership (PPP) laws.
The government planned to put up
about 60% of the cash to finance the
projects, around half of which are in the
energy industry. But falling oil prices have
pushed spending cuts of 3% this year, so the
government will need to seek more private
investment.
Mexico's finance ministry estimates that
the 740-plus projects will add between
1.8% and 2% to its GDP during the four-year
period.

"Expectations are high with regards
to new projects for the next three to four
years," says Bernardo García Franco, head
of project finance at BBVA Bancomer's
Latin American corporate and investment
banking department.
Competition mounts
Already, Mexico's largest builders, Grupo
Carso, ICA, OHL México and Pinfra,
have been positioning themselves to win
concessions.
"We have seen a very intense
competition," says Víctor Bravo, chief
financial officer of ICA, the country's largest
infrastructure company. "In Mexico, there
are a lot of projects, a lot of interest, in the
tender offers. We have a lot of companies
that we haven't seen before. Now they're
here."
Sergio Hidalgo, chief executive
officer of OHL México, says that with
the government's budget constraints,
opportunities for private involvement will
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