Singapore to take part in Mexico's Tehuantepec isthmus corridor

The governments of Mexico and Singapore agreed to cooperate on a plan to launch two sea port projects in the Tehuantepec isthmus region, which divides the Gulf of Mexico and the Pacific Ocean.

The announcement was made on Tuesday after Singapore Prime Minister Lee Hsien Loong arrived in the Latin American country for a four-day visit. 

President Andrés Manuel López Obrador (AMLO) welcomed Loong at the national palace in the capital to discuss trade opportunities, investment plans and the Asian country’s incorporation into the Pacific Alliance, among other topics.

The leaders also spoke about the participation of Singaporean company Surbana Jurong in the master plan to build a trade corridor across the Tehuantepec Isthmus, according to a statement. 

They reportedly shook hands on an agreement to explore opportunities to collaborate on the logistics, financing and management of the ports – one in Salina Cruz, Oaxaca state, and the other in Coatzacoalcos, Veracruz state.

TEHUANTEPEC ISTHMUS CORRIDOR

The Tehuantepec isthmus corridor (PDIT) is one of AMLO’s seven priority infrastructure projects.

It was announced shortly after AMLO was elected last year and it entails the modernization of a railroad between the ports on the Pacific and Atlantic coasts to increase cargo traffic between the two. 

The 215km railroad has been described as a rival to the Panama Canal and the federal government wants to have it completed by 2021.

Airport infrastructure in the area will be modernized and fiber optic lines installed. A gas pipeline will be built in the region and the oil refineries in Salina Cruz and Minatitlán, west of Coatzacoalcos, will also be upgraded.

In September, the federal government declared the creation of the decentralized state-run entity Corredor Interoceánico del Istmo de Tehuantepec (CIIT), which will be responsible for integrating the activities formerly managed by the port authorities (APIs) of Coatzacoalcos and Salina Cruz, and freight rail company Ferrocarril del Istmo de Tehuantepec (FIT).

In August, the state governments of Oaxaca and Veracruz signed an agreement with the government of Singapore to allow Enterprise Singapore, a statutory board under the authority of the island city-state's trade and industry ministry, to prepare a master plan for the trade corridor.

That master plan has reportedly been submitted to AMLO already.

According to a public speech the president gave in Oaxaca in April, the PDIT will benefit 76 municipalities in both states and it will use mainly public investment and possibly private investment too, but AMLO assured that no foreign investment would be needed.

The original investment for the Tehuantepec isthmus was estimated at 214bn pesos (US$11bn) when it was presented.

Mexico's transport and communications ministry (SCT) said in January that 2.5bn pesos would be allocated to the project this year and the 2020 budget proposal submitted by finance minister Arturo Herrera to the lower house of congress in September included a combined allocation of around 500mn pesos for the port authorities of Coatzacoalcos and Salina Cruz to carry out developments.

When asked which sectors, he responded: “In the commercial, oil and gas, technology, innovation and logistics sectors, for example. In the first nine months of this year, there was annual growth of 12% in bilateral trade, which caught our attention, and we are analyzing whether it will be a lasting trend,” he told El Economista. 

 (Photo credit: Gobierno de México)