Mexico takes scythe to 2017 transport ministry budget

A day after being appointed as Mexico's finance minister, José Antonio Meade Kuribreña presented to congress the country's federal budget for 2017, which contains swingeing cuts.

The ministry plans to slash 240bn pesos (US$12.7bn) overall, bringing next year's budget to 4.77tn pesos.

HIGHWAYS

The transport and communications ministry (SCT) faces a cut of 27% which would see its spending pot for 2017 reduced to 77.7bn pesos. The country's road network would take the biggest hit as the proposed budget for road construction is 12bn pesos compared with 21.8bn pesos allocated for 2016. The ministry has been allocated 7.87bn pesos for road maintenance and repairs, compared with 15bn pesos this year.

AIR

The air transportation sector would receive a 5.54bn-peso budget, some of which would be pumped into construction of the new Mexico city airport.

The cuts to the SCT's budget would not affect some projects such as the Mexico-Toluca passenger railway. The proposed budget for the train project is 17.8bn pesos, an increase from this year's 7.1bn pesos.

A 1.1bn-peso budget was proposed for the ports sector, and the railway sector would have a budget of 25.6bn pesos, which includes the funds for completing construction of the Mexico-Toluca rail project. Mexico's recently created railway sector regulator would receive 140mn pesos, which would come out of the rail sector budget.

On infrastructure spending, Meade said projects currently under construction such as the capital's new airport and the Toluca and Guadalajara passenger railways were considered a priority, according to local press.

"This is a responsible budget package, given the importance of providing certainty regarding Mexico's economy in a difficult economic climate..." Meade was quoted as saying.

Mexico based its budget on a forecast economic growth rate of 2-3% in 2017.

As reported this month, Mexico's national infrastructure program (PNI) for 2014-18, launched by President Enrique Peña Nieto after he took office in December 2012, is behind schedule.