Thursday, June 20, 2024

Infrastructure investment not enough, say engineers: it’s US $50 billion short

An extra US $50 billion a year is needed in infrastructure spending in order to meet the nation’s needs and the federal government’s investment target, attendees at an engineer’s conference said this week.

The federal government and representatives of the private sector presented a US $42.95-billion National Infrastructure Plan (PNI) on Tuesday designed to stimulate the ailing economy.

Speaking at the National Civil Engineering Congress the same day, the president of the Mexican College of Civil Engineers said the investment in 147 projects over a period of five years is insufficient.

Ascensión Medina Nieves described the agreement between the government and the private sector as being of “the greatest importance” but expressed disappointment that the size of the investment isn’t bigger.

“With these investments, we’ll get close to 3% of the country’s GDP, far below what is recommended internationally for emerging countries like Mexico, which is between 5% and 8% . . .” he said.

The government is targeting the former figure of 5% of GDP.

Reyes Juárez del Ángel, president of the consultancy firm FOA Consultores, and other conference attendees said that about US $70 billion per year is needed in infrastructure investment to reach that figure. However, total investment is only projected to be US $20 billion per year.

Juan Luis Flores, a managing partner at Valorum Capital, was among those who agreed that the planned investment was insufficient, while an expert on public-private partnerships expressed doubt that all of the PNI projects announced on Tuesday will go ahead.

“Will the support that is being offered [in the agreement] really be given?” Francisco Treviño asked, pointing out that the projects have not yet been put out to tender or obtained financing.

The “great Achilles heel,” he added, will be obtaining public resources to prop up private projects that turn out to be unprofitable.

At the same conference, Communications and Transportation Secretary Javier Jiménez Espriú said the 147 projects announced on Tuesday represent only a first step in the infrastructure plans for the country.

Both the government and the private sector could invest more, he said, explaining that the latter has identified 1,600 potential infrastructure projects.

The government, however, already has an ambitious infrastructure agenda. Among the large projects it plans to build during President López Obrador’s six-year term are a new Mexico City airport, an oil refinery on the Tabasco coast and the Maya Train railroad on the Yucatán peninsula.

Source: Reforma (sp), La Jornada (sp) 

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