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Mexico mulls private investment to expand infra portfolio

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Mexico mulls private investment to expand infra portfolio

President Andrés Manuel López Obrador (AMLO) said his government is pursuing an agreement with the private sector for further infrastructure financing, potentially expanding Mexico’s portfolio of 147 infrastructure projects in the next four years.

The president made the announcement during his daily press conference on Monday, and the investments would add to the 859bn pesos (US$43bn) the private sector already confirmed in November as part of the 2020-24 infrastructure program (PNI).

AMLO said that his chief-of-staff, Alfonso Romo, and Mexico’s largest business association (CCE), which played a key role in drafting the PNI, are negotiating the agreement. 

“We are going to have an infrastructure project agreement with the private sector,” AMLO said in response to a question about a possible light rail link between the central region and the north.

Regarding the 147 projects announced in November, he said “with COVID, works that are going to be carried out with investment from the private sector were halted.”

Mexico shut down its construction sector from April-June due to the pandemic, although works on AMLO's megaprojects continued.

A SECOND INFRASTRUCTURE PROGRAM?

While it was not clear which agreement AMLO was referring to, recent developments suggest a second infrastructure deal backed by the private sector is in the works to lift the economy out of the COVID-19 downturn. 

Three months ago CCE president Carlos Salazar Lomelín asked lawmakers to promote a counter-cyclical infrastructure program to help with the post-pandemic recovery.

The proposal became more concrete when the construction chamber (CMIC) presented 294bn-peso package including 242 infrastructure projects to the conference of state governors (Conago).

The package covers 161 highway projects, 36 water projects, 32 urban development projects, eight tourism projects, three education infrastructure projects and one energy and one cultural project. 

Conago reportedly met with the president on August 14 to discuss the proposal.

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