Mexico to lean on PPPs through 2016

Budget woes are behind a push to enlist the private sector for projects on the Secretariat of Communications and Transportation’s 2016 agenda.

On the heels of an announcement that Mexico's Secretaria de Comunicaciones y Transportes (SCT) 2016 budget was being slashed by M$105 billion (€5 billion; $5.6 billion), or 16.5 percent year-on-year, the agency has unveiled a push to utilise public-private partnerships (PPPs; P3s) to carry out this year's projects.

This year, the government plans to invest M$61 billion in road infrastructure, M$10 billion in railways, and M$500 million in the port industry.

These investments are meant to be used to leverage much larger contributions from the private sector through P3s, said communications and transportation secretary Gerardo Ruiz Esparza at the Expo Rail 2016 event held in Acapulco last week.

“In the ports sector, with an investment of M$500 million we can achieve an investment of more than M$20 billion,” Esparza told the press, alluding to the level of financial support that the government hopes to attract from the private sector.

Rail projects to be launched this year using P3s include the Celaya overpass and Manzanillo tunnel, according to local media reports.

The SCT noted that M$43.6 billion of the road transportation budget for 2016 will be used to fund a road improvement programme. The remaining M$24.5 billion will go toward building out and modernising about 553 kilometres of national roads. 

Projects to construct 20 new highways and 10 federal roads are also set to be launched this year.