Texcoco airport cancellation still sparks controversy

The exit of Carlos Urzúa as finance minister caused a stir in Mexico, particularly because of his resignation letter, in which he criticized the current administration.

In a statement about his many disagreements on economic issues with other members of the administration, he said some “public policy decisions [were taken] without sufficient justification.” This fueled speculations if he was referring to certain infrastructure projects.

The former minister ended such speculations in an interview with local magazine Proceso, in which he cited the cancellation of the 285bn-peso (US$14.9bn) airport in Texcoco although “works were at a very advanced stage, with too much money involved.”

His remarks fueled the months-long controversy over the cancellation and the proposed three-airport system alternative including an international airport at the Santa Lucía military air base in Mexico state.

At a press conference on Monday, transport and communications minister Javier Jiménez Espriú responded to Urzúa’s criticism and clarified some previous comments.

PROGRESS AND PRICE TAG

Jiménez Espriú argued that construction at Texcoco airport was not that advanced as works had only reached the 20% mark. This figure came from US construction and engineering firm Parsons, which managed the project. It was provided to Jiménez in September and then appeared on the website of President Andrés Manuel López Obrador (AMLO).

Gerardo Ferrando, director of state holding GACM, told the press conference the project was canceled with only soil compaction works performed at the site where two runways would have been built, and with only the foundations of the terminal building and the inter-modal transfer center being complete. The control tower was reportedly 33% finished.

A lawsuit filed in October by the consortium that was building the terminal – the largest contract awarded for the infrastructure – stated that GACM had failed to provide them with the project’s engineering design. Information about this lawsuit had also been disclosed by Jiménez shortly before AMLO took office in December.

“It was not really known [at the time of the cancellation] how much the project was going to cost or when it was going to be completed,” Jiménez said.

To back up his claim about the unknown price tag, Jiménez cited another Parsons report, submitted to GACM in 2016, which estimated the final cost at US$16.5bn, with operations starting not before 2024.

CANCELLATION REASONS

Although Urzúa acknowledged that some of the land around the mega airport belonged to individuals with ties to the previous government – bolstering the claim that the actual goal for building the airport was to create a giant real estate development in the area – he implied that expropriating that land would have been preferable to impede such business over canceling the airport altogether.

Jiménez Espriú countered that cancellation was never about such alleged corruption. “The argument for the decision was based on technical and financial reasons.” 

The minister also claimed some previous comments were misinterpreted. He never said that no corruption could be found. “We have detected many irregularities, but this information has already been submitted to the relevant internal control entities, and to the public administration ministry (SFP) [for review].”

CANCELLATION COSTS

Canceling the mega airport will likely cost 100bn pesos. Overall, 692 contracts, had been awarded, of which 620 are already terminated and 58 are in the process of termination. GACM keeps another 14 contracts, which entail the provision of services.

The 58 contracts still awaiting resolution include the largest ones awarded: for the terminal building and its foundations, the two runways, the control tower, and the inter-modal transfer center.

Although the 692 contracts were worth around 178bn pesos, the works completed by the time the airport was canceled required around 60bn pesos, which the government will pay the contractors, according to the transport and communications ministry (SCT).

The early termination of the contracts will also require the government to pay for the contractor’s recoverable expenses, which the SCT estimates could reach up to 40bn pesos. The exact figure will be known by the end of the month, Jiménez said.

SANTA LUCÍA

Urzúa also criticized the government earmarking significant resources this year for building an international airport at the Santa Lucía military air base. In his view, the project is not ready and the money should have gone elsewhere.

Although Jiménez did not specifically address the former minister’s comment, he said that both the master plan and the airspace design study for the airport have already been completed and that environmental ministry approval of the EIA is impending.

The SCT said the airspace design study has confirmed that maintaining operations at Santa Lucía, Mexico City’s Benito Juárez airport (AICM), and the international facility serving Mexico state’s capital Toluca – the components of the three-airport alternative – is feasible. The results of the study, conducted by Airbus-owned services firm NavBlue, have already been presented to representatives from the International Air Transport Association (IATA), and starting in August will be presented to airline representatives.