Is Mexico running out of money for infra projects?

The plan of Mexico's outgoing President Andrés Manuel López Obrador to terminate the trust that financed the Maya train megaproject and redirect its funds is causing concern among consultants and lawyers consulted by BNamericas.

Last week, López Obrador submitted a bill to congress to redirect funds from fees paid by foreign tourists when entering the country. These funds have been going to the Tren Maya trust, but under the bill they will be going to firms managed by the defense ministry (Sedena) to finance “diverse activities and needs.”

Among those activities is the management and promotion of the network of airports operated by the armed forces, including the recently opened Tulum international airport, where some works are still pending.

Reaction from local experts

The termination of the trust and redirection of funds could leave the Maya train “unprotected” and see it suffer operational problems, according to Víctor Hugo Martínez Rendón, an independent consultant who worked on the project. 

“The Maya train has a trust to support it because the project itself cannot be sustained with the funds coming from the passenger fares, so it is financed until the point where it is self-sustainable,” he told BNamericas. 

“The airports, especially the Tulum airport that is not finished, need a lot of subsidies. I believe there are no funds to finish both projects,” he said, referring to the Tulum airport and the Maya train.

Flagship infrastructure projects built by the López Obrador administration, including the Maya train, will continue needing a considerable amount of resources, according to Juan Carlos Machorro, a partner at law firm Santamarina + Steta and an infrastructure expert.

“They will not reach the point of equilibrium where they have profits [because] they are projects that were not determined as financially feasible or successful from the beginning,” he told BNamericas. “More funds will be required to start operations, manage the projects and maintain them. They will probably need to be subsidized for a long time.”

On October 1, Claudia Sheinbaum, also a member of ruling Morena party, will take office as president.

Her administration will start with a budget deficit of 6%, one of the largest in the country’s recent history, said Machorro, adding that the current political situation is not helping the health of the economy nor the public finances.

“I have concerns regarding the funds that will be needed for infrastructure and other sectors of the economy, including social programs, healthcare, security, education,” he said. “Investments are being held back by the measures of the outgoing administration, such as the judicial reform and the elimination of autonomous bodies. Without investments, there will be no economic growth and no funds.”