(Bloomberg) — Mexican President Andres Manuel Lopez Obrador announced a 297 billion peso ($14 billion) infrastructure plan on Monday as his government tries to patch up relations with the private sector.
Backed by the heads of the Business Coordinating Council and the Mexican Business Council, two of Mexico’s largest private companies chambers, Lopez Obrador said Monday that the deal to co-operate on 39 highway, port and energy projects would pave the way for further public-private projects.
“It is just the beginning because we are going to continue working together and there will be more investments and more jobs,” Lopez Obrador said at his daily press conference.
The infrastructure plan had been repeatedly delayed as relations between Lopez Obrador and business groups soured over the administration’s opposition to private clean energy projects, and its refusal to provide fiscal aid during the coronavirus crisis. Mexico’s economy is suffering its deepest recession in nearly a century this year, and is forecast to mount a slower recovery due to the lack of government support.
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Today’s package includes five public-private partnerships in energy totaling $4.6 billion in expected investment.
The biggest is a $2.5 billion coker unit at the Tula refinery in central Mexico that had been announced by state oil company Pemex under the former government. It was then suspended when AMLO decided against it, and is now being revived.
The joint-venture was originally going to be constructed and operated by a consortium led by Japan’s Mitsui, Cosmo Oil Co., Spain’s Cia. Espanola de Petroleos, and Mexico’s Empresas ICA SAB and U.S.-based Fluor Corp. AMLO didn’t say which companies will be involved in the resurrected plan.
One of the projects is a liquefaction unit in partnership with the state utility CFE and port authority at Salina Cruz in the southern state of Oaxaca. Another liquefaction plant — Costa Azul, operated by IEnova, the Mexican subsidiary of Sempra — has been stalled as it awaits the green light from the government to begin operations. Shares of IEnova dropped 2.5% on Monday.
(Updates with energy investment from 5th paragraph)
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