Route of the rail line in Oaxaca and Veracruz. Route of the rail line in Oaxaca and Veracruz. Economic zones are marked in black; highlighted states are those intended to benefit.

Governor: new railway competition for canal

Construction begins next month on coast-to-coast rail line

Construction of an interoceanic railway line linking the Pacific and Gulf coasts of southern Mexico will begin in January, the governor of Oaxaca has announced.

Alejandro Murat said that work on the first phase of the 310-kilometer double-track line between the ports of Salina Cruz, Oaxaca, and Coatzacoalcos, Veracruz, will represent the start of a free trade agreement for the southeast of Mexico.

Mexico’s largest railway operator, Ferromex, won the tendering process to operate the new line.

Both port cities as well as a corridor running between them are slated to become special economic zones (SEZs) after President Enrique Peña Nieto signed decrees for their creation earlier this year.

Other projects to complement the railway will also be completed using capital provided by the National Infrastructure Fund (Fonadin), Murat said.

They include increasing the capacity of the Salina Cruz port, building a 1-billion-peso agricultural park, modernizing the Ciudad Ixtepec airport and completing the Mitla-Tehuantepec highway.

A plan to reconfigure and modernize the Pemex oil refinery in Salina Cruz, where a huge fire broke out in June, is also being considered.

Murat first announced a 3-billion-peso investment package for the projects in March, including 700 million pesos for a direct highway between Salina Cruz and Coatzacoalcos.

The governor added that the opening of the industrial interoceanic corridor is expected to attract additional private sector investment from China, Germany and the United States.

Japanese multinational Mitsubishi has already committed US $1.2 billion for the creation of wind farms in the area.

Murat said that the project to link the two oceans would place Mexico in a position where it can compete with the Panama Canal.

“We are going to create favorable conditions . . . to send a message at an international level that in these zones in southeastern Mexico, where Oaxaca and Veracruz are located, there is strong potential that can compete with the Panama Canal and other parts of the world . . .” he said.

In an interview with the newspaper Milenio, Murat said that the idea to create an interoceanic corridor across the Isthmus of Tehuantepec was first suggested more than 100 years ago during the presidency of Porfirio Díaz.

However, he added that the time is now right to turn it into reality because the SEZs provide the tax system and legal certainty required to make it a success.

“The Isthmus of Tehuantepec is ready to go into operation and take advantage of its great potential with a minimum of investment,” Murat said.

“The economic zones can be the trigger for this great project. There is infrastructure, connectivity, no large investments are required, it has all the attributes, the conditions are given,” he added.

Source: Milenio (sp)

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