Sunday, June 23, 2024

Economy Minister: Isthmus corridor will contribute up to 5% of GDP

The Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT) project will represent as much as 5% of Mexico’s GDP once operational, according to Economy Minister Raquel Buenrostro. 

In a press conference, Buenrostro gave an update on the bidding process for five of the 10 development poles, or hubs, of the CIIT, saying that once the project is up and running “with all of the planned investments of the anchor companies, [the corridor] will contribute between 3 and 5 percent of GDP.”

AMLO at Tuesday press conference
The president shows the planned trans-isthmus railway project. (Gob MX)

The project will include 10 industrial parks and also seeks to rehabilitate a 300-km (186-mile) railway between the port of Coatzacoalcos, in the Gulf state of Veracruz, and the Pacific port of Salina Cruz, in the state of Oaxaca.  

The first phase will include five poles (four in Veracruz and one in Oaxaca) designated as Coatzacoalcos 1, Coatzacoalcos II, Texistepec, Juan Evangelista and Salina Cruz. Sixty-five development companies have expressed interest in investing, and several of them are considering more than one of the hubs, Buenrostro said. 

 “Of those 65 participating companies, several are interested in various poles. Each pole has more than 30 companies interested,” she told reporters. 

Each of these companies has investment plans ranging from US $10 million to US $1 billion, with the capacity to create between 400 and 500 jobs. According to Buenrostro, the winning companies will be those that commit to a solid investment and a socially conscious vision, meaning that the companies bring well-paid jobs that contribute to the community and to local needs. 

When completed, the corridor will have 10 industrial parks, which are expected to greatly contribute to the economic development of southeastern Mexico. (Gob MX)

“[It] is a development project with an economic trigger, linked to the integration of companies and society,” she said, comparing the project to the Panama Canal.  

The public tender process will end on Nov. 17, and the winning companies will be announced that same day, Buenrostro concluded.  

Oaxaca Governor Salomón Jara Cruz and Veracruz Governor Cuitláhuac García Jiménez announced several tax incentives for investors that include a 100% exemption applied to income tax in the first three fiscal years and a 50% exemption during the subsequent three years. Payroll tax will also be exempted along the same schedule if the company employs at least 20% women, 5% older adults, and 10% young adults who are starting their professional lives, they said. 

Other incentives the governors offered included excise tax for cargo transport vehicles, transport vehicles of up to 15 passengers, boats and motorcycles and discounts on municipal and state permits.  

With reports from Forbes Online, La Jornada and El Economista

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