October 29, 2018 / 5:29 AM / 18 days ago

UPDATE 2-In blow to business, Mexicans spurn new Mexico City airport

(Adds comments from business leader, lawmakers, background)

By Christine Murray and Noe Torres

MEXICO CITY, Oct 28 (Reuters) - Mexicans voted to scrap a part-built $13 billion new airport for the capital in a divisive referendum pushed for by President-elect Andres Manuel Lopez Obrador, dealing a blow to business leaders like Carlos Slim, and causing the peso to slide.

Roughly a million people, just 1 percent of Mexico’s electorate, participated in the referendum held over four days, the Arturo Rosenblueth Foundation, the non-profit organisation that supervised the count, said after voting ended on Sunday.

Almost 70 percent voted against the new airport, it said.

Called a “public consultation”, the vote was non-binding, but the leftist Lopez Obrador, who had called for the referendum and was against the new airport, has pledged to respect the result.

The peso weakened some 2 percent against the dollar after the results were announced, making it by far the biggest loser among major currencies against the dollar.

The public was asked if the next government should finish the new airport to replace the current hub, or add two runways to convert a military air base in Santa Lucia, around 50 km (31 miles) north of the capital, and keep the current airport.

Lopez Obrador, who takes office on Dec. 1, argued during the election campaign that the new airport was tainted by corruption and would be expensive to maintain due to the geological complexity of the terrain. It has been under construcion on the drained bed of Lake Texcoco east of Mexico City since 2015.

Companies owned by the family of Mexican billionaire Carlos Slim, once the world’s richest man, were co-designing, co-financing, and co-building the Texcoco project. Mexico’s pension funds had also put up money.

In a statement on Sunday in English, Lopez Obrador’s transition team said the incoming government would not allocate new resources to the Texcoco project, but that the rights of investors and bondholders were fully guaranteed.

Designated transport minister Javier Jimenez has canvassed to convert the air base at Santa Lucia.

Still, Gustavo de Hoyos, head of employers’ confederation Coparmex, urged Lopez Obrador to finish the Texcoco project, one of the flagship public works of outgoing President Enrique Pena Nieto of the centrist Institutional Revolutionary Party (PRI).

Cancelling the new airport would cost about 120 billion pesos, the Grupo Aeroportuario de la Ciudad de México (GACM), which has been handling the project, said earlier this year.

CRYING FOUL

The public vote was organized by Lopez Obrador’s National Regeneration Movement (MORENA), without the national electoral authority INE. Opposition parties say that the consultation did not follow the proper rules.

Several local media outlets reported cases of people who were able to vote more than once, and highlighted failures in software used to register voter identification cards.

On Twitter, the PRI accused the incoming government of rigging the vote in favor of Santa Lucia.

Javier Lozano, a former labor minister and backer of the defeated PRI candidate in the presidential election, described the vote to cancel the airport as “terrible news”.

“We look like a banana republic to the world,” he said in a televised discussion of the decision on broadcaster Televisa.

MORENA lawmakers sought to cast the vote as a referendum on the business ties of the PRI government, whose credibility was battered by allegations of corruption and conflicts-of-interest.

“The markets have our respect, but this decision was for the people to make,” Marti Batres, the leader of the Senate and a senior member of MORENA, told the Televisa discussion. (Additional reporting by Dave Graham Editing by Christian Schmollinger & Simon Camerion-Moore)

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