Mexico’s has a $44bn infrastructure plan to boost economy

On Tuesday, Mexico‘s government announced the first phase of an ambitious infrastructure plan underwritten by the private sector, covering a wide range of transportation and other public works projects over five years.

The plan compromises private-sector commitments totalling 859bn pesos ($44.3bn) stretched across 147 projects.

The top sectors covered by the plan are transportation, tourism and telecommunications.

The transportation projects alone, including highways, rail, ports and airports, are seen costing nearly 284 billion pesos ($14.7bn) through 2024, or one-third of the plans spending target, the government said.

President Andres Manuel Lopez Obrador said the second phase of infrastructure projects will be announced in January and will focus primarily on the energy sector.

“We’ve joined forces to create a mechanism that allows for the acceleration of the private sector’s infrastructure project initiatives,” said Carlos Salazar, the head of Mexico’s main business council CCE, at the event announcing the plan.

Lopez Obrador, who has sought to trim government spending during his first year as president, described the first phase of the infrastructure plan as giving a jolt to Mexico’s economy.

“We’re providing a huge push with this investment programme,” he said while congratulating assembled business leaders for their “civic and social” commitment to Mexico’s future growth.

Mexico’s richest man, Carlos Slim, whose holding company Grupo Carso is involved in the plan, said after the announcement that attractive conditions exist for private-sector driven investments.

“There are healthy public finances with a lot of discipline on the part of the public sector … and I think that gives great confidence for private investment, which is what’s available,” he said.

As growth has cooled, Lopez Obrador’s government has targeted a 1 percent primary budget surplus this year to project fiscal responsibility.