MEXICO CITY – The Mexican government and business sector have announced a $44.2 billion package of private investment infrastructure.
The first phase of the project was announced on Tuesday including 147 infrastructure projects worth 859 billion pesos ($44.2 billion) with private investment which aims to promote economic growth, with an emphasis on the south of the country.
Alfonso Romo, presidential chief of staff, said during a press conference the National Infrastructure Plan will include 1,600 projects.
Romo said the package does not include energy and health projects, which President Andres Manuel Lopez Obrador requested to be managed independently, and announced that plans will be published in January in these areas.
He added there has recently been $5 billion investment in infrastructure and real estate trusts.
“Entrepreneurs have been bringing the necessary capital to carry out these works,” he continued.
He said there are $14 trillion with “negative rates” in the world.
“There is a great opportunity to capture that money, and all that is being done is to create a framework of trust so that money that now has no destination comes to this country,” he added.
“This infrastructure project will generate many jobs, it will increase the country’s competitiveness and above all it will improve the well-being of so many Mexicans who do not benefit from what we are starting today,” he added.
Carlos Salazar, president of the Business Coordinating Council, said 72 works from the first package, which include transport, telecommunications, water, sanitation and tourism, are estimated to begin to be executed in 2020, another 41 between 2021 and 2022, and 34 more between 2023 and 2024.
Of the total investment, $22.2 billion could be applied in 2020 and the figure almost equals the amount allocated for infrastructure in the government budget for next year, he added.
For the period 2021-2022, projects worth $13.1 billion have been identified and for the next two years works are planned for approximately $8.8 billion.
Salazar said the private sector has expressed to the president a commitment to attack poverty, promote development and fight corruption, and that is why 42 projects are in the south-east of the country.
“This is a sample of how, through investment, we can grow and combat the shortcomings of many Mexicans,” he said.
Luis Niño de Rivera, president of the Banks of Mexico Association, said the bank has $35.2 billion invested in infrastructure, and has $30.9 billion of liquidity.
Of that amount, the bank can invest 14%, so it has approximately $4.3 billion available per year to invest in the projects, he added.
Administrators of retirement funds have collected $200.6 billion and only invest 4% in infrastructure, he said.
“If we increase that money by 1% annually we will have 39,000 million pesos ($2 billion) per year to invest, and private investment funds in Mexico, which have 2.6 billion pesos ($133.7 billion), would be another 26,000 million pesos ($1.3 billion) annually,” he continued.
He said the additional resources in international banking and international investment funds “that have clearly expressed their interest in investing in Mexico, allow us to ensure not only the financing of the 147 (initial) projects, but of all packages of investment in infrastructure of the private initiative.”
President Lopez Obrador said “private sector investment in the country’s economic growth is required.”
He said the investment “is a clear sign that there is a will, a clear manifestation of support so that together we can move forward to our beloved Mexico.”