The Mexican president risks leaving big projects unfinished

MEXICO — Mexican President Andrés Manuel López Obrador loves big projects and hates leaving them unfinished, but that’s likely what he will do when he leaves office at the end of 2024.

The president promises that his major construction projects will be finished by then. But one of them – a tourist train line in the Yucatan Peninsula – will have to be stilted for 50 miles to traverse some of the world’s most fragile and environmentally sensitive geographic areas.

Meanwhile, an oil refinery – and a series of planned industrial parks – have no natural gas supply. And a government Internet-for-All program has spent hundreds of millions of dollars without even matching the coverage of private services.

López Obrador has completed one of his main projects, the construction of a new airport in Mexico City. But because it was put into service more than a year before the end of rail and road links, it is little used. He canceled another airport project that his predecessor couldn’t complete, hence his rush.

López Obrador admits the government is unwieldy – he often calls it a “rheumatic elephant” that needs to be pushed. He also attributes the delays to what he calls a vast conspiracy of conservatives, businessmen and US-funded non-governmental organizations.

“Pseudo-ecologists are coming from Mexico City and other parts of the country, funded by the United States government, and they are filing these injunctions against us,” the president complained.

Few disagree with his desire to bring jobs, development, banking, internet, and decent healthcare to Mexico’s poor and remote countryside. But his grand plans were thwarted, largely by his own belief in a few central rules.

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THE GOVERNMENT MUST DO EVERYTHING

López Obrador relied almost exclusively on state-owned enterprises of the type that dominated the Mexican economy in the 1970s, most of which were sold off by his predecessors.

Some he recently created, like the government mining company he gave a monopoly on lithium deposits, hoping to jump on the electric car boom in the United States, touting its reserves of the key component of battery. But the company has no experience in producing or refining lithium and has yet to turn a shovelful of dirt.

The president also wants to revive some state enterprises, such as a small state bank for which he plans to build thousands of branches, and Mexicana, the defunct state airline. Elsewhere, countries are moving away from these nationalized consumer enterprises.

López Obrador’s “Internet for All” program is perhaps less controversial. While Mexico’s private and foreign telecommunications already provide coverage to approximately 85% of Mexican territory, Mexico’s poorest citizens live in communities so small or remote that it is not profitable to serve them.

López Obrador assigned the task to the state-owned electricity company, which has no experience in the field, and to a small, cash-strapped telecommunications company that the government bailed out and took over.

Gerardo Flores Ramirez of the Mexican Telecommunications Law Institute think tank notes that despite spending nearly $900 million from 2020 to 2023, the government system only covers about 70% of the country and will not achieve even modest goals and reduced by 92% until 2028.

“They won’t reach the goals,” said Flores Ramirez.

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THE GOVERNMENT CAN FORCE THE PRIVATE SECTOR TO BID

López Obrador is trying to persuade private companies to help him achieve his goal of moving jobs south, further into Mexico and away from the US border, and start using government infrastructure that doesn’t really meet their needs. needs. He cajoles them and threatens them in turn.

At the beginning of his mandate, he forced natural gas companies to renegotiate supply contracts that he considered too lucrative. And he changed the rules for foreign-owned renewable energy and gas power plants, to favor dirtier state-owned power generation facilities.

He has, however, avoided expropriating anything, even what he really wants, like a limestone quarry owned by Alabama-based Vulcan Materials near the Caribbean coast resort town of Playa del Carmen.

The president wants to turn the crystalline quarry pools into a tourist attraction – despite them being full of crocodiles – so he has tried to force the business, so far unsuccessfully, to sell, ordering it to close and encouraging Mexicans to file a complaint against the company.

Likewise, it has struggled to get airlines to use its new Mexico City airport despite limiting flights to the old one closer to the capital.

López Obrador is also desperate for customers for the rail and road corridor linking the Pacific to the Gulf of Mexico, through the narrow belt of Mexico known as the Isthmus of Tehuantepec.

He hopes to build a chain of about 10 industrial parks along the corridor, to attract foreign manufacturing plants from the US border. He threatened to no longer grant permits to water-intensive industries at the border, where most businesses cluster for reasons of logistics and proximity.

López Obrador – known in Mexico by his initials, AMLO – essentially issued an ultimatum to a US-based company to build a liquefied natural gas terminal in Mexico. But the gas pipelines would have to be built to supply such a plant. Private companies stayed away, instead announcing plans for LNG ports on the US side of the Gulf.

“The government’s ability to move projects forward has been weak and unclear, as in the case of increasing natural gas supply,” said Adrian Duhalt, a research fellow at the University’s Center on Global on Energy Policy. of Columbia.

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START A PROJECT, THEN DETERMINE HOW TO END IT

López Obrador began his administration with a big dream: the 950-mile (1,500 kilometer) Maya Train, a tourist line to loop around the Yucatan Peninsula, linking resort towns and archaeological sites.

On the stretch between the Caribbean resorts of Cancun and Tulum, it was initially planned to ride on elevated tracks above the coastal highway, where most of the hotels are located. But hotel owners have complained about the effects of construction, road closures and land impacts on either side of the highway.

López Obrador therefore decided to modify the route – without an environmental study – to cut a 68-mile (110 kilometer) strip through the jungle between Cancun and Tulum.

Environmentalists have fought against the cutting of trees and have pointed out that the line will likely cut through and collapse the region’s extensive network of underground caves and chasm lakes where some of North America’s oldest human remains have been found.

López Obrador changed the project again. Now he says 50 miles (80 kilometers) of the double track will be built on an elevated platform 2.5 meters (meters) above the forest floor, supported by thousands of concrete pillars that won’t hurt the caves below.

China built a longer railway on similar terrain, and it took seven years. López Obrador gave army engineers a year to do the job in Mexico.

Few people believe it can be done in that time frame, if at all.

“It’s not a far-fetched project, just because it’s not a project, it’s just a prank,” said Jose ‘Pepe’ Urbina, a diver who has explored the caverns for decades.

“It will not be finished and it will cost a lot more than expected. It’s going to cost taxpayers today, and the next generation will have to fix what’s damaged.