November 26, 2019 / 3:04 PM / 18 days ago

Mexico to spend $44 billion on infrastructure in first phase of plan

MEXICO CITY (Reuters) - Mexico’s government on Tuesday announced the first phase of an ambitious infrastructure plan underwritten by the private sector, covering a wide range of transportation and other public works projects over five years.

FILE PHOTO: Mexico's President Andres Manuel Lopez Obrador speaks during his daily news conference at National Palace in Mexico City, Mexico November 14, 2019. REUTERS/Carlos Jasso

The plan compromises private-sector commitments totaling 859 billion pesos ($44.3 billion) stretched across 147 projects.

The top sectors covered by the plan are transportation, tourism and telecommunications.

The transportation projects alone, including highways, rail, ports and airports, are seen costing nearly 284 billion pesos ($14.7 billion) through 2024, or one third of the plan’s spending target, the government said.

President Andres Manuel Lopez Obrador said a second phase of infrastructure projects will be announced in January and will focus primarily on the energy sector.

“We’ve joined forces to create a mechanism that allows for the acceleration of the private sector’s infrastructure project initiatives,” said Carlos Salazar, the head of Mexico’s main business council CCE, at the event announcing the plan.

Lopez Obrador, who has sought to trim government spending during his first year as president, described the first phase of the infrastructure plan as giving a jolt to Mexico’s economy.

“We’re providing a huge push with this investment program,” he said, while congratulating assembled business leaders for their “civic and social” commitment to Mexico’s future growth.

Mexico’s richest man, Carlos Slim, whose holding company Grupo Carso is involved in the plan, said after the announcement that attractive conditions exist for private-sector driven investments.

“There are healthy public finances with a lot of discipline on the part of the public sector...and I think that gives great confidence for private investment, which is what’s available,” he said.

As growth has cooled, Lopez Obrador’s government has targeted a 1% primary budget surplus this year in an effort to project fiscal responsibility.

Reporting by Sharay Angulo; Additional reporting by Abraham Gonzalez; Editing by David Alire Garcia and Alistair Bell

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