Mexico will cancel its partially-constructed new airport
It hasn’t taken long for Mexico’s new president to make a splash on the world stage, though not necessarily the splash that the world stage was hoping to see: he has canceled the new airport under construction in the capital, Mexico City.
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Mexico will abandon a partially-built new airport for its capital city after a bizarre unofficial vote held by president-elect Andres Manuel Lopez Obrador.
AMLO, as he is known, has not even taken office yet, but in a strange move, his inner circle of advisors organized an unofficial vote that determined the fate of the country’s largest infrastructure project. The X-shaped airport designed by the famous British architect Norman Foster is under construction in an area called Texcoco, north of the city. The project’s budget was $15 billion and the airport, if completed, would have been the third-biggest in the world. The current airport is at capacity and cannot take on additional flights. The business community in Mexico urged the government to expand air capacity, to further boost the economy. The airport broke ground in 2016 and was scheduled to open in phases between 2020 and 2065. It was to be the biggest infrastructure project in Mexico in over 100 years and was one of the signature achievements of outgoing President Enrique Peña Nieto.
But it is likely to be no more. The incoming president campaigned hard against the airport, saying that it was riddled with corruption and would damage the environment. He said that the government had no business spending so much money on an airport when there were more pressing priorities, such as poverty, in the country. There are other objections. The airport was designed to accommodate 120 million passengers—more than any other airport in the world today. But it would have interrupted the flight pattern of 100,000 migratory birds. It would have required draining a wetland and may have caused worse flooding in the eastern part of Mexico City, which already suffers from bad flooding. And its cost have ballooned—from an estimated $8 billion when the project was announced to $15 billion at its most recent estimate. Over two-thirds of Mexicans have never been on a plane, so they will not see an immediate benefit.
And the existing government’s planning process left much to be desired—that means, it wasn’t an ideal process. They were not transparent about the costs or the potential environmental impact. Many people suspected that the country’s business elite got an inside deal and inflated the costs, which would eventually be paid by ordinary Mexicans.
So the government’s process for building the airport was not exactly a model of good government, but the vote to cancel it was downright strange. Here’s why I say it’s bizarre. First of all, AMLO isn’t even in office yet. Second, the vote was organized by his inner circle of advisors, not by any government electoral agency. The polling places didn’t even cover the whole country, or even the whole area that would be affected. They set up polling places in 500 towns, which only served about 80 percent of the country’s population. They printed a million ballots—great, except that Mexico has 90 million registered voters. Since the vote wasn’t organized by the government, it wasn’t clear how the organizers would know who was even allowed to vote. And AMLO’s own political party supervised the balloting. To nobody’s surprise, the result reflected AMLO’s own views in the campaign. When observers discovered people were voting more than once due to technical problems with the voting machines, the organizers said the double-voting didn’t affect the outcome.
In announcing the vote results, AMLO said that it was the end of the “ties between economic and political power.”
Oh dear. The world’s investment community looked on with concern at what happened. International investors lent the Mexican government $6 billion to construct the new airport; they now wonder if they will ever be paid back. People are asking now whether the Mexican government can be counted on to keep its word. Some people might not care as much about what international investors think about the politics of Mexico. But any time a government wants to do a big project, it has to borrow money from somewhere, and that somewhere is from foreign investors. Without a good reputation in international markets, the cost to borrow money for big projects can be high—sometimes impossibly high. The world’s lenders are now taking a second look at Mexico’s reputation.
The big new airport may be canceled, but something needs to be done. The existing airport is bursting at the seams. It handles 50% more passengers than it was designed to do; the number of passengers going through the airport is increasing ten percent a year. There is no space to expand the existing airport. AMLO’s alternative is to repurpose a military base near the existing airport; so instead of having one large airport, Mexico City will have two airports close to each other, but not connected. The combined capacity of those two airports will be limited because they are so close: planes serving one airport will have to avoid crashing into the planes serving the other airport.
Whoa. Sounds like the business community might be in for some turbulence in Mexico with the new president.
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