Saturday, July 26, 2025

Isthmus development plan: 8-billion-peso investment and new free zone

President López Obrador officially announced an initial investment of 8 billion pesos (US $403.4 million) to develop the Isthmus of Tehuantepec region and pledged that a new free zone will be implemented there within three years.

Speaking at an event yesterday in the port city of Salina Cruz, Oaxaca, López Obrador urged Mexico’s private sector to invest in the Isthmus of Tehuantepec Development Plan, explaining that for “strategic and sovereign” reasons foreign investment won’t be sought.

“It’s going to be a national investment; I call on the businesspeople of Mexico [to invest] so that we have a mix of resources, public and private investment, for the development of the Isthmus of Tehuantepec,” he said.

The president said the government has created a 3-billion-peso (US $151.3-million) trust to undertake work to expand and modernize the ports in Salina Cruz and Coatzacoalcos, Veracruz, and that around 1 billion pesos (US $50.4 million) will go to the restoration of the trans-isthmus railroad between the two cities.

The Salina Cruz-Coatzacoalcos highway will be widened in the section between Acayucan, Veracruz, and Matías Romero, Oaxaca, the Pemex refineries at Salina Cruz and Minatitlán will be upgraded, a new trans-isthmus gas pipeline will be built and a fiber optic network will be installed to improve internet connectivity, López Obrador said.

He explained that funds to complete all the projects were announced in the 2019 budget that was presented by Finance Secretary Carlos Urzúa on December 15. López Obrador added that he expected Congress to approve the spending package this week.

The president said that once the infrastructure projects have been completed, the Isthmus of Tehuantepec region will become a free zone with lower taxes than most other parts of the country.

“Once we have the basic infrastructure, which I calculate will be in two years, in the third year a free zone [will be implemented] in the isthmus . . . Once we’ve modernized the port, the railway tracks, perhaps the new gas pipeline using the right of way we already have, [once we’ve] upgraded the two refineries, then there will be a free zone. What does that mean? That we’re going to lower the IVA [value-added tax] and ISR [income tax] by half,” López Obrador said.

Communications and Transportation Secretary Javier Jiménez Espriú, who will be responsible for the rail, highway and fiber optic network projects, said that the aim of the development plan is to turn the isthmus region into “one of the most attractive places for investment and one of the most developed places in the world.”

The distance between Salina Cruz, on the Pacific Ocean, and Coatzacoalcos, on the Gulf of Mexico, is just over 300 kilometers.

The isthmus region, which is also Mexico’s wind power mecca, has long been touted as a potential rival to the Panama Canal.

Source: El Economista (sp) 

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