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Cost of Mexico's Scrapped Airport Reaches $9B

Tuesday, November 19, 2019

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After scrapping the construction of a Texcoco, Mexico-based international airport last year, President Andres Manuel Lopez Obrador’s (AMLO) project cancellation costs are adding up and are likely to exceed $9 billion—more than the estimated $8.3 billion needed to finish the project.

Regardless of the price, AMLO claims the cost of ending Texcoco is worth it.

Texcoco Airport Project History

In 2014, the airport’s design plan won an international architectural competition with designs comprised by Foster + Partners, Fernando Romero Enterprise and Netherlands Airport Consultants.

The renderings revealed that the international airport would feature up to six runways and a 560,000-square-meter terminal. Spans of the airport were to be in excess of 100 meters (the largest 170 meters), and designers said that they were influenced by Mexican architecture.

The scheme was slated to be Mexico’s largest infrastructure project.

However, last year, in August, AMLO outlined concerns of what could have been one of the world’s largest airports. In a press conference, AMLO stated that the fate of the $13.3 billion project would be left up to public opinion and the masses to decide whether to:

  • Cancel the plans and replace the new airport design with two additional runways at the Santa Lucia military airport, linked to the existing airport, or
  • Tender the development and allow private investors to fund the construction.

Funding was also one of the main points of contention surrounding the project, as AMLO ran on a platform highlighting possible corruption and wasteful spending surrounding the plans during his campaign.

The stability of the project—in addition to the money concerns—were at the forefront for those opposing the airport. The People’s Front in Defense of Land-Atenco, a political group, strictly opposed the project since its conception in 2014 and argued that the new airport wasn’t viable for several reasons, including the land surrounding the site, which it said is unsuitable for construction, citing the presence of subterranean water. The group also cited a lack of environmental impact studies.

By November, the project was officially scrapped, even though the airport was reported to be about one-third complete. The decision came after a public referendum which ended in 70% voting to cancel construction.

Only about 1.2% of Mexico’s registered voters turned out for the referendum—which was held over four days—breaking down to about 311,132 people voting for the current project to continue and 750,000 against.

Obrador said that canceling the project would save the federal government around 100 billion pesos ($5 billion), and that updating the existing Benito Juarez International Airport with two new runways would cost about 70 billion pesos.

In February, AMLO announced that the country’s main airport would be getting a third terminal and promised to refurbish and modernize the existing facility, which sees about 40 million passengers annually. AMLO also added that the nearby Santa Lucia military base would be turned into an airport and that his administration would encourage more use.

A few months later, in May, AMLO announced a June target date for construction to start on the new 72 billion-peso Felipe Angeles Airport at the Santa Lucia Air Force Base, just north of Mexico City.

However, the groundbreaking wouldn’t take place until mid-October, after a court cleared the last of over 100 appeals that delayed the start of the project. According to AMLO, the Felipe Angeles Airport will save $6.2 billion in comparison to the Texcoco project.

What’s Happening Now

The San Francisco Chronicle reports that although some $5 billion had been put into the airport in Texcoco, AMLO is still fighting off legal challenges since the project’s cancellation last year.

The backlash comes from various business leaders and activists who wish to see the project revitalized. However, The Chronicle adds that this is very unlikely, as presidents in Mexico are reported to have sweeping power.

"This is a perfect reflection of how, when he decides something is a priority, it's almost impossible for him to change his mind," said Carlos Petersen, an analyst at Eurasia Group. "The airport cancellation was the first time investors got a look at how he'd operate, and we're seeing the same with Santa Lucia."

However, besides being told that the two additional commercial runways would be built for about $4 billion, no other information has been released about the military base airport, as the Defense Ministry in charge has labeled the work as classified.

AMLO has promised that all information about Santa Lucia will one day be made public. “We have nothing to hide. We're not like the conservatives."

The Felipe Angeles Airport at the Santa Lucia Air Force Base is to open for commercial flights by March 2022. Reports add that the airport won’t replace Benito Juarez but should take some of the pressure off. The almost 90-year-old facility is using generated revenue to pay off some of the Texcoco cancellation costs as well.

   

Tagged categories: Airports; Commercial / Architectural; Commercial Construction; Cost-savings; Government contracts; Maintenance + Renovation; Ongoing projects; Project Management; Projects - Commercial; SA; South America; Terminals

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