Mexico has just decided to scrap huge airport project, already half built, due to corruption, over-spending etc

A hugely expensive airport project in Mexico City has been abandoned, more than halfway built.  Mexico’s president-elect says he will respect the result of a referendum that rejected (70%) a partly built new airport, effectively ending the $18.35 billion project.  It had been mired in over-spending and corruption, and was started with what critics said was little real environmental study by current President, who leaves office on December 1st.  Organisers of the referendum reported just over one million people voted. The vote has been criticised in part as only about one of every 90 registered Mexican voters participated.  It is unclear what will be done with the enormous foundations already built on the site, a former lake bed known as Texcoco. Much environmental damage has already been done. Critics of the cancellation had said it might affect investor confidence in Mexico. However, the president-elect wants to add 2 commercial runways to a military air base in the town of Santa Lucia, about 45km from Mexico City, involving journeys from the existing airport for transfers etc. The existing city airport was built in the 1940s and is considered to be working at near capacity; it would have been closed had Texcoco been built. Cancelling the Texcoco airport would save Mexicans, allegedly, about $7 billion. 



Mexico has just decided to scrap a $18 billion airport project that’s already half completed

IN A bizarre move, a hugely expensive airport project has been abandoned — even though it’s more than halfway built. And it’s going to cost billions.

AP  (  Australia
NOVEMBER 1, 2018

MEXICO’S president-elect says he will respect the result of a referendum that rejected a partly built new airport for Mexico City, effectively ending the $18.35 billion project.

“The decision taken by the citizens is democratic, rational and efficient,” Andres Manuel Lopez Obrador said after 70 per cent voted against the plan.

“The people decided.”

It is unclear what will be done with the enormous foundations already built on the site, a former lake bed known as Texcoco.

Organisers of the referendum reported just over one million people voted in the referendum. The vote has been criticised in part because only about one of every 90 registered Mexican voters participated.

Mexico’s peso slid more than three per cent against the US dollar after the decision was made public, with the interbank rate ending at 20.06 pesos to US$1. Banco BASE said it was the biggest single-day drop since November 9, 2016, when markets reacted to Donald Trump’s election as US president the day before.

Monday’s fall wiped out all the peso’s gains this year. The Mexican stock exchange’s IPC index ended the day down 4.2 per cent.

Critics of the cancellation had said it might affect investor confidence in Mexico, but Mr Lopez Obrador said investors, debt holders and contractors in the abandoned project will be protected.

The president-elect pledged during his campaign to cancel the Texcoco project, claiming it was marred by overspending and corruption. After winning, he said the issue should be put before Mexican citizens.

He favours adding two commercial runways to a military air base in the town of Santa Lucia, about 45km from the capital.

That would imply an improved road to get there from Mexico City and the current 1940s-era airport. The city’s airport is now working at near capacity and would have been closed had Texcoco been built.

Mr Lopez Obrador said he has received assurances from international experts that the current airport and Santa Lucia could operate simultaneously. Still, given the distances between the current airport, the planned Santa Lucia terminal and an existing satellite airport in the nearby city of Toluca, it is unclear how people could make connecting flights within any reasonable amount of time.

The president-elect said Mexicans will save about $7 billion by abandoning the unfinished Texcoco project, which was started with what critics said was little real environmental study by current President Enrique Pena Nieto, who leaves office December 1.

Mr Pena Nieto said his government respected whatever decision Mr Lopez Obrador may make once president, but construction would go ahead until November 30, to meet obligations under bonds that were issued to finance the project.

He warned if the airport was cancelled, it could cost taxpayers.

“It is anticipated that ultimately there would have to be prepayment of bonds issued to finance this project, and probably this will demand fiscal resources additional to” existing funding currently being collected through an airport tax, he said.

It was supposed to be the signature infrastructure project of Mr Pena Nieto’s administration, though it wouldn’t have been finished for several years more.

But the outgoing administration was marked by corruption and allegations of insider dealing with contractors, which helped propel Mr Lopez Obrador to the presidency on July 1.

The referendum held over Thursday to Sunday marked the first time such a large project had been submitted to a public debate and vote.

Mr Lopez Obrador said the decision meant “corruption has ended”.

Mexico’s incoming president Andres Manuel Lopez Obrador said he would halt construction of the new airport for the capital after it was rejected in the referendum.

Mexico’s business community, which overwhelmingly supported the now-cancelled project, questioned the referendum, which they said was unofficial, unrepresentative and biased.

Juan Pablo Castanon, the head of Mexico’s Business co-ordinating Council, an industry group, fiercely criticised Mr Lopez Obrador’s decision to obey the vote, saying it “seriously hurts Mexico’s image in the world” and “sends a message of uncertainty” to financial markets.

Some questioned whether such a decision, involving complex issues of air traffic control, should be decided in a referendum.

The national Confederation of Chambers of Commerce wrote that “it should be a technical and financial decision, not a political one, based on a popular vote.”

Residents protest against the airport’s construction, saying not only is it a potential sinkhole of corruption, but it would be an environmental disaster.

Mr Lopez Obrador called the decision “a triumph for the environmental movement,” saying the Texcoco project threatened to eliminate the last remaining vestiges of lakes that once covered the Valley of Mexico. Lake Nabor Carrillo had become a refuge for migratory birds but was too close to the Texcoco site and would have posed a threat of birds hitting jet engines.

However, much of the environmental destruction associated with the Texcoco project is already done.

Millions of tons of rock were quarried in nearby towns and transported to the site to fill and drain the swampy former lake bed.

Mr Lopez Obrador said he hoped the unfinished site could be used to create “a big sports and ecological centre for Mexico City”.



See also:

Foster + Partners and FR-EE’s Mexico City Airport Cancelled Following Public Vote

29 October, 2018

by Mónica Arellano (Arch Daily)

Following his election a few months ago, the current president-elect of Mexico, Andrés Manuel López Obrador, announced that a referendum would be held to determine whether or not the government should proceed with the Foster + Partners and FR-EE’s proposed 13 billion dollar project for the International Airport of the Mexico City.

Making good on his campaign promise, a public vote on the project’s fate was held from 25-28 October, asking citizens to answer the following question:

Given the saturation of the International Airport of Mexico City, which option do you think will be best for the country? The two options given to voters were:

“Recondition the current airport in Mexico City, Toluca and build two runways at the Santa Lucia Air Base”

“Continue with the construction of the new airport in Texcoco and cease operations of the current International Airport of Mexico City.”

Only 1 million people voted (the country’s population is approximately 131 million). 311,132 participants voted for the new airport (the Texcoco option) and 748,335 voted to refurbish the existing airport. Despite this low turnout – less than 1% – the vote is purported to be binding.

This controversy comes amidst the fact that construction had already started on the new airport and that it was expected to open as soon as 2020. It is not clear how much money has already been spent on the project, but questions regarding the cost-efficiency of the new outcome have already begun.

The result has additionally triggered a depreciation of the peso; 1 USD is now equivalent to 19.70 Mexican pesos.

So far no official statements have been made by Foster + Partners or FR-EE. However, Fernando Romero, the founder of FR-EE, shared a tweet written by Juan Pablo Castañon, President of the Business Coordinating Council (translated below).

“We recognize the citizens who expressed their opinion in the consultation about the airport. However, we reiterate our position that this consultation, as it was organized, should not be binding and did not offer guarantees of impartiality, certainty, and objectivity.”

According to El Financiero, there is speculation that the cancellation of the New International Airport for Mexico City may open the door for Mexico to be taken to international courts. Moisés Kalach, coordinator of the Strategic Neurological Advisory Board, stated that this is one of the conclusions of a study carried out by private initiative.

Following the vote, the current president-elect publicly endorsed the Santa Lucia project (the refurbishment option, listed first in the public vote), pointing out that the current airport will be improved and the Toluca Airport will be reactivated.

The decision made by citizens is rational, democratic and effective. Since the analysis began on this matter we showed that the interests of companies and investors were safe, there are funds that support the commitments in contracts and investments but besides that there is support, our word, our authority moral and policy to address any claim of companies or investors.

– Andrés Manuel López Obrador