Building of new Mexico City airport suspended, but some works continue

TEXCOCO, Mexico (Reuters) - Some work continued on Thursday at a partly-built $13 billion Mexico City airport that the new president is scrapping, even after the government announced construction had been halted.

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Around 20 laborers were working on an access bridge to the project at a dried out lake bed on the capital’s eastern flank. Security personnel, who prevented Reuters from getting close to the main site, said some construction continued there.

Communications and Transport Minister Javier Jimenez Espriu told a regular news conference on Thursday that “construction of the airport is officially suspended.”

Before taking office last month, President Andres Manuel Lopez Obrador said the airport would be scrapped, justifying his decision on a straw poll that was widely derided as opaque and open to question because his party organized it.

The head of the government-run agency responsible for the project, Gerardo Ferrando, said the only construction still underway was to preserve what had already been built, such as drainage works, slabs of foundation and a partly-built tower.

“It is not a switch you can just turn on or off automatically,” Ferrando said on local radio. “Works need to be gradually finished.”

Ferrando said the government was looking into making part of the site into a type of park for public use.

Lopez Obrador argued the airport had been tainted by corruption and would be too expensive to maintain. But his Oct. 29 announcement rocked Mexican financial markets, wiping billions of dollars off the value of the main stock index.

The government had to broker a deal with bondholders who had bought $6 billion in debt to fund the construction, buying back $1.8 billion of the bonds to prevent a default.

Transport minister Jimenez said that negotiations to terminate contracts on the project were underway.

The government has not said how much it could need to pay to compensate contractors who won bids.

But it argues that its alternative plan to convert a military air base into a commercial airport and overhaul the capital’s current hub and another in the nearby city of Toluca, will cost less than finishing the canceled project.

The outgoing government said the airport was about one-third complete when Lopez Obrador decided to cancel it. Jimenez maintained it had not advanced that far.

Additional reporting by Veronica Gomez, Dave Graham; Editing by Susan Thomas and Grant McCool