Insights & Perspectives
The Bold But Uncertain Future of Mexico: The Mexico City New International Airport in Focus
In light of the upcoming presidential elections in Mexico, one monumental project is both contentious and important for shaping Mexico’s economic growth: the over $13 billion construction of the Mexico City New International Airport (NAICM).
Given their immense potential for growth, Latin American’s largest economies are not proportionally investing in infrastructure; Mexico, however, has taken the leap in launching one of the more ambitious building projects in the region with its new international airport set for a 2020 opening.
An initiative of President Enrique Peña Nieto’s administration, it is funded both publically and privately: roughly 60% by the government, and 40% by banks loans and securities offerings such as bonds. The project comes with great vision in terms of style and scale, as well as a host of technical challenges—and, the country’s looming July 2018 presidential election, in which the popular left-wing candidate, Andres Manuel Lopez Obrador, proposes to halt its construction.
In early 2017, Mexico’s Ministry of Communications and Transportation awarded a nearly $4 billion contract to the consortium Grupo Carso led by the country’s richest man, Carlos Slim Helú. It includes construction companies Infraestructura y Construcción (CICSA) and Fomento de Construcciones y Contratas (FCC) based in Mexico and Spain, respectively.
While CICSA leads the consortium to build the main terminal, the Mexican government announced it will share the construction of the runway with GIA+A, Promotora and Peninsular, which are respectively owned by Mexican businessmen Hipólito Gerard, Olegario Vazquez Aldir and billionaire Carlos Hank Ron.
Size, Style & Sustainability
According to FCC, the new airfield will be one of the largest infrastructure projects underway in Latin America. With six runways, the Mexican government expects the terminal to serve 68 million passengers annually.
Slim’s influence is also indirectly present in the architecture: the X-shaped terminal building was designed by Fernando Romero, Slim’s son-in-law, along with Pritzker Prize-winning British architect Norman Foster.
The main terminal will not only be aesthetic (the design draws inspiration from the monumental structures of Mexico’s ancient civilizations), but sustainable: the glass-and-steel structure will collect and recycle rainwater, include natural ventilation, and employ innovative heat solutions;
it will be the first airport structure of its scale to gain the Platinum LEED (Leadership in Energy and Environmental Design) seal of environmental sustainability.
Erected on federally-owned land near the Benito Juárez airport, the site sits atop an old waterlogged lake bed that requires significant engineering for proper development. The 12,400-acre parcel had to be paved with tezontle, a reddish volcanic rock used extensively throughout construction projects in Mexico.
The runways will need three more coats, plus two layers of basalt that will sink about two meters into the ground, pushing out whatever water is left in the earth to make the runways strong enough to absorb the impact of regularly landing planes. Other setbacks include a delayed rail line that was designed to ferry materials, among others.
Model for Growth
The Mexico City New International Airport is hailed as an emblem of a modernized Mexico, a country claiming the second largest economy in Latin America. It may be one step in the direction of closing the infrastructure gap on the continent.
Until around 2014, Latin American economies showed robust performance; growth was possible even in the context of generally weak infrastructure. The Economic Commission for Latin America and the Caribbean (ECLAC) estimates that the region needs to invest 6.2% of its annual GDP, from 2012 to 2020 (roughly 320 billion dollars), in order to eliminate the gap between supply and demand. This is far above the current level of investment; none of the region´s major economies is currently investing more than 3% of its GDP in infrastructure.
While Mexico has a host of other domestic issues including corruption, poverty and its uncertain participation in Nafta, the Mexican International Airport is an example of how domestic infrastructure, and the political climate that encourages it, can either helped or hindered growth.
SOURCES: Coface; Bloomberg; Forbes; World Bank.org