Military involvement in Mexico's infrastructure projects comes under scrutiny

After taking office on October 1 and contrary to the expectations of the private construction sector, Mexican President Claudia Sheinbaum has defended the role of the armed forces in building strategic infrastructure projects – a trend started by her predecessor Andrés Manuel López Obrador.

Experts claim the approach could impact procurement and construction processes, as the defense ministry (Sedena) and the navy ministry (Semar) do not always have the technical capability or experience to carry out such projects. If so, that could lead to private-sector firms with more expertise being brought into the projects.

“It isn’t necessarily more difficult but there’s definitely a difference that has sometimes led to doing ‘educational work’ with them because the military and navy don't know these infrastructure topics to the depth that their colleagues at the infrastructure, communications and transport ministry do,” Sergio Chagoya, an expert in infrastructure investment at law firm Santamarina + Steta, told BNamericas.

“It’s understandable that those ministries don’t have all those capabilities and that’s why the private sector's participation is needed.”

During her campaign, Sheinbaum assured the construction chamber (CMIC) that private sector participation would be key to her infrastructure plan.

CMIC president Luis Méndez Jaled said in July that he was optimistic and believed public-private partnerships would be brought back for infrastructure and energy projects, considering the ambitious plan presented by Sheinbaum that would require more resources than the government could provide. 

“We want to believe in our president-elect, she has a very ambitious infrastructure plan and talks about collaboration. We as an institution asked her directly how much the private sector would participate and she responded affirmatively, 100%,” Méndez Jaled said.  

But contrary to expectations, incoming defense minister Ricardo Trevilla Trejo said during his first speech that the army would continue to be a “strategic ally” in the development of infrastructure and priority projects. The message was endorsed by Sheinbaum during a ceremony marking her first flagship infrastructure project – the AIFA airport-Pachuca rail line – on October 6, which will be built by the military.  

While Méndez Jaled expressed disappointment regarding the decision, he said the chamber would attempt to reach out to Sheinbaum’s team to suggest mixed financing schemes, given the numerous projects that the president intends to build and the budget which contains major social spending items, all in a context of the highest deficit recorded in recent Mexican history. 

“We agree that, when the works are related to national security, [military participation] is welcome but otherwise the builders must be carrying out these works,” he said on October 8. “There will not be sufficient funds [for every infrastructure project] and she has support. That's where mixed investments can be used, and we’ll approach her team with these proposals.”

During the previous administration, López Obrador said the use of the army was intended to carry out projects at lower cost and to get rid of PPPs that were not necessarily beneficial for the Mexican government. 

While the former president referred during his morning press conferences to important savings that came with the use of the army, there is no information on these efficiencies that is available for verification. 

Roberto Hernández, a lawyer and expert in international construction law, says opacity in the use of funds is one of the issues that Sheinbaum's administration will also adopt by continuing with this policy. 

“The thing with the military is not whether they do or don’t do a good job. What happens with the projects they have is that they’ve been classified as being of national security. Hence all related information is not public and there's no accountability. They're literally a black box in which you don’t know anything,” he said. 

According to CMIC, of the 683bn pesos (US$35.2bn) allocated to infrastructure developments in 2023, only 26% (184bn pesos) could be tracked and accounted for.