Mexico’s biggest construction company is no longer involved in a massive highway project in the state of Oaxaca.
Empresas ICA, which has fallen on hard times due to a heavy debt load and government restraint, has lost the concession for the Barranca Larga-Ventanilla freeway linking the city of Oaxaca to the tourist destination of Puerto Escondido.
CNN Expansión reported this week that the concession for the 104-kilometer highway through the southern sierra will remain in the hands of the National Infrastructure Fund, which will reactivate the project in January.
Completion will take 12 months, said Infrastructure Undersecretary Oscar Callejo of the federal Communications and Transportation Secretariat.
According to ICA’s figures, 5.255 billion pesos have been invested so far and as of September the project was 84% complete. Last month, Oaxaca governor-elect Alejandro Murat said federal approval had been given to spend another 3 billion pesos to finish it.
In addition to Empresas ICA’s own financial problems were construction delays caused by disputes with indigenous communities over compensation for expropriation of their lands. One company executive said off the record nearly two years ago that ICA employees were being kidnapped as disputes flared.
The contract to build the highway was first awarded in 2008 to the Mexican construction firm Omega, but it had to bow out due to financial difficulties. The concession was granted to ICA in 2012.
Callejo said ICA would receive no compensation for the loss of the project. A reconciliation of the accounts showed there was close to a zero balance, he said.
The firm ran into trouble last year as government-funded infrastructure projects dried up due to spending cuts. The peso’s decline against the dollar and the company’s large debt didn’t help.
While ICA may be down it is not out. The company joined forces with entrepreneur Carlos Slim and a Spanish firm to make a proposal this week for construction of the terminal building for Mexico City’s new airport.
Source: CNN Expansión (sp)