Home Mexico Travel & Economy Big isthmus project set to start next year

Big isthmus project set to start next year

by Brent May

isthmus-project-mexicoIt’s been decades in the making but there is new progress being made on the Transisthmus Project, an ambitious transportation infrastructure and industrial development plan for the Isthmus of Tehuantepec.

The federal government will launch the project formally next year with an initial investment of 4.34 billion pesos (about US $279 million) for the first stage, but the process is beginning this month with a 48-million-peso study that will be completed by the end of the year.

The first stage will entail the development of transportation infrastructure that will include railroads costing 1.75 billion pesos, improvements at the ports of Coatzacoalcos in Veracruz and Salina Cruz in Oaxaca with a cost of 1.56 billion, highway construction costing 704 million and airports projects worth 320 million pesos.

Completion of the first stage is expected to take a year and a half while the second and third stages are forecast to take another three and five to 10 years, respectively.

The new transportation infrastructure will improve links between the two ports and will be financed with public funds. The industrial development component — the construction of industrial parks — will be funded largely by the private sector.

The isthmus has some key advantages, such as the short — 302 kilometers — distance between the Atlantic and Pacific oceans, access to world markets, the transportation and communications infrastructure already in place, which includes two ports, two airports, a rail line and highway, and the potential for further development of wind energy.

An important spin off expected from the investment is a boost to economic development in one of the country’s poorest regions, with an increase in Gross Domestic Product from 2% to 4.5% annually. This is hoped to double per-capita GDP from $5,000 to $10,000 a year, bringing it up to the national average.

The region has been designated a special economic zone where preferential taxation and financing will be offered to encourage private-sector investment.

The state oil company has already announced plans to spend $2 billion on what it calls the Transoceanic Belt to add two new gas pipelines, moving petroleum products from the Gulf of Mexico to the Pacific Ocean. It has already built two crude-oil pipelines and another for refined products.

Work has already started on improvements to the military airport at Ixtepec in preparation for its establishment as a commercial facility for civic aviation, which has also been a work in progress for two decades or more.

Meanwhile, El Imparcial in Oaxaca reported yesterday that Chinese interests are exploring the construction of a steel manufacturing plant in the isthmus, taking advantage of iron ore reserves in the state of Oaxaca.

The $1.2-billion plant would produce 3 million tonnes of steel a year.

Article credit: Mexico Daily News

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