AMLO’s Noncontroversial Megaproject
By RICARDO CASTILLO
Out of the four major infrastructure projects Mexican President Andrés Manuel López Obrador (AMLO) has currently underway, the least publicized is the construction of the Tehuantepec Isthmus industrial development based on the revamping of the ancient port-to-port, 306-kilometer-long railway leading from Salina Cruz in the Pacific to Coatzacoalcos on the Atlantic Gulf of Mexico.
Just for the record, the three other separate projects of the AMLO administration are the Felipe Ángeles International Airport (AIFA) near Mexico City, the Olmeca oil refinery in the state of Tabasco and the president’s proposed crown’s jewel, the 1560-kilometer-long Tren Maya tourist train uniting the Yucatan peninsula, all three of which have been met with controversy.
The idea of developing the tongue-twisting “transistmico” railway is nothing new. Ever since the first cross-country railroad from Tapachula on the Guatemalan border to the Juárez at the U.S, border, developing the isthmus into a Panama-type of interoceanic link has been in the plans of numerous Mexican governments.
More recently, back in the late 1990s, then-President Ernesto Zedillo opted for divesting the entire government-owned railways infrastructure in the nation, privatizing operations. Zedillo split up the national railroad network into five different routes and awarded concessions to five companies.
One of them was the Maya Route railway running from Tapachula to Merida since 1947. It was awarded in concession to the U.S.-owned cargo freighter Genesee & Wyoming, which soon turned it into a profitable operation. Zedillo divested all other central and northern Mexico lines but the government kept, and keeps, direct ownership of the railroads operational rights.
The ensuing president Vicente Fox, who served from 2000 to 2006, saw the potential of the isthmus line to stretch further south to Central America through the Puebla-Panama Project. It looked marvelous on paper, but was impossibly expensive to develop.
Fox’s dream came to an end with the sweeping gales of the 2004 Hurricane Stan devastated Central America from Honduras northward, destroying the bridges built on the Chiapas state Pacific marshes. Fox tried to have cargo operator Genesee & Wyoming foot the reconstruction bill, but the company could not afford it. That, and the fact that some emergency funds had allegedly magically “disappeared” from the administration, sent the railroad into almost permanent oblivion, except from some rickety old trains giving partial services to the isthmus ports.
In the 2006 to 2012 presidency of Felipe Calderón, the plan for the isthmus railway was to have the government-operated ports of Salina Cruz and Coatzacoalcos privatized to install an intermodal privately run cargo system. Once again, for reasons galore, the turkey did not fly.
President Enrique Peña Nieto, who served from 2012-2018, also attempted to revamp the old tracks, this time with a majority support in Congress, to follow up on the isthmus port privatization. Peña Nieto devoted government efforts to build the new luxurious version of the New International Mexico Airport (NAIM), which he managed to get underway and roughly 70 percent completed before AMLO took office in December 2018.
As promised during his electoral campaign, the first move AMLO made in his mandate was to announce the construction of his four banner projects. And as one of his first decisions, he cancelled all further construction of the NAIM on the Texcoco lakes basin east of Mexico City. He immediately replaced the NAIM plan with the swift construction of the AIFA. And also went ahead with his Tren Maya project, the then-named Dos Bocas Refinery program and, last but not least, pushing ahead the Isthmus development project.
Before proceeding, AMLO carried out public referendum consultations with Isthmus inhabitants. The response from the 79 municipalities along the railway (46 in the state of Oaxaca and 39 in the state of Veracruz) was that the majority of the people who participated in the referendum wanted a passenger train with stations for major townships (there are no cities along the way).
The Economy Secretariat, in charge of the project, opted for the creation of an in-bond (maquiladora) industry corridor, with assembly plants along the way. For that, and with land allotments from municipalities, it followed the blueprint of the industrializing plan that had made maquiladoras successful enterprises along the northern border with the United States.
The original plan outlined the development of 10 1000-acre industrial parks, but after planning and consulting with the National Association of Privately Owned Industrial Parks (AMPIP, in Spanish), it was decided that the best size for parks in the isthmus would be 500-acres apiece, keeping the rest of the allotted land in reserve. Each park was to have its own railroad spur.
The government has since awarded recognition to AMPIP members for developing Mexico’s assembly for an export industrial boom as they have the knowhow to fulfill the needs newcomer industrialists have to set up shop and train personnel. The Economy Secretariat will auction the individual parks among AMPIP members, as well as private real estate developers.
To developers, the area poses new cultural challenges they did not face along the northern border, including the fact that the isthmus at large has been for centuries the habitat of at least 39 Meso-American tribal groups that speak as many different dialects.
Another cultural stumbling block is that most of the inhabitants of the isthmus live off farming, with scant industry spread around the land that is not economically relevant. On this particular issue, the government has said that it is ready to help with technical schooling for candidates to become factory employees, but regionally, the change will not just big, but abrupt once industries begin hiring.
There is also the issue of geography, since the northern maquiladoras were next door to the United States, their main market, but the isthmus is physically distant from that market.
This is where the transistmico project stands as of now. The real advance is that the tracks, as well as passenger trains, are ready to begin operations.
Now, the next trials will be for container cargo, which is to undergo “break bulk – make bulk” unpacking and repacking procedures for proper delivery.
The transistmico was originally slated to start operating next month, but that deadline looks unlikely to be met.
Whenever it comes, the salient feature of the transistmico is that — unlike the other three AMLO megaprojects — it never raised a political stink.