HIGHWAY NATIONAL INFRASTRUCTURE PROGRAM

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HIGHWAY NATIONAL INFRASTRUCTURE PROGRAM

On December 22, 2018, federal government announced a new Highway National Infrastructure Program which aims, among others, to construct pave roads in different municipalities through the Mexican territory, as well as to rehabilitate and terminate highways that as of today are either in bad conditions or were not finished during the last administration.

$30.0 billion pesos (approximately USD $1.5 billion) are estimated to be invested for the maintenance of federal highways and rustic roads, which comprise approximately 40 thousand 500 hundred kilometers of highways throughout Mexico.

$10.5 billion pesos (approximately USD $525.0 million) are to be invested in 2019 to finish 22 highways and to continue works in 48 additional federal roads.

Furthermore, as per the program that was announced, for 2019, $2.5 billion pesos (approximately USD $125 million) will be provided by the federal government to initiate the construction of municipal roads for which Municipal governments will be in charge of handling and managing all funds to be received for the construction of their municipal roads.

Additionally, the Ministry of Communications and Transportation has pointed out that during the following 6 years, 5 thousand 531 kilometers of roads are expected to be constructed in which an average of 197 thousand jobs are expected to be created.

The total amount expected to be invested in the coming years for the Highway National Infrastructure Program is of $78.0 billion pesos (approximately USD $3.9 billion) and will consider works related, among many others, to the following highways: (a) Oaxaca – Mitla-Istmo de Tehuantepec, and (b) Oaxaca-Puerto Escondido.

As per the federal government announcement, there will also be investments of approximately $27.3 billion pesos (approximately USD $1.3 billion) in public-private partnership agreements aimed to construct 299 kilometers of additional highways.

Although it has not been officially announced, tenders to award agreements related to the construction of highways are expected to be released during this year by the Ministry of Transportation and Communications. Once released, bidding guidelines would need to be analyzed as to determine all requirements included therein as to register and participate in the tenders.

The main objectives of the federal government with this program are: (i) achieve a sustainable, efficient, secure and modern communication and transportation network; (ii) guarantee a highway infrastructure as to connect the existing port, railroads and airport infrastructure in México; (iii) allow an efficient and safe traffic of individuals and goods throughout the territory.   

With these objectives Mexican President seeks to maintain, conserve and increase the existing federal highways and roads as to decrease transportation costs, as well as to encourage municipal governments to construct municipal roads to connect such municipalities and increase their development.

The lawyers of the energy and infrastructure area of our firm are available for any questions or comments on the above.

SINCERELY

Mexico City, January 10th, 2019