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Mexico Infrastructure Improvements Plan

Mexico Infrastructure Improvements Plan

Mexico Infrastructure Improvements

Recently, Mexico has taken significant measures to improve infrastructure, and a recent infrastructure plan will continue this growth, thus cementing the Latin American country’s status as a manufacturing powerhouse. Mexico infrastructure improvements have already increased international investment, and new plans will further expand Mexico’s capacity.

Advent of Mexico Infrastructure Improvements

When President Enrique Peña Nieto took office several years ago, he expressed a commitment to a reform agenda that could only be described as sweeping. The next few years saw reforms in virtually every public sector. Labor laws were overhauled. Intellectual property laws were tightened. The energy sector was partially privatized. Security in the border region was made a priority. And among those reform programs was an ambitious plan for Mexican infrastructure improvements in the overdeveloped and growing country.

The National Infrastructure Program 2014-2018, as it was called, was commissioned in 2014 and aims to pour approximately $600 billion USD – about 8% of GDP – into modernizing infrastructure vital to the Mexico’s economy. The strategic initiative is pulling funds from both public and private sources and targeting approximately 750 specific projects. The country is now primarily overhauling the energy and transportation sectors. The efforts include among others:

  • New ports
  • Expanding existing ports
  • Paving more roads
  • Extending railways
  • Expanding electricity generation capacity

Additional sectors also being targeted in this infrastructure plan include:

  • Communication
  • Water
  • Health
  • Urban development
  • Tourism

Specific Goals for Mexican Infrastructure Improvements

In looking to the future, Mexico is working toward specific goals to improve the country’s standing as a significant player in a global economy. Below are some of those goals broken down by sector.

In the Energy sector:

  • Extend and develop infrastructure for exploring and extracting hydrocarbons.
  • Encourage the development of fuel transportation and storage projects.
  • Promote the development of domestic petrochemicals.
  • Expand quality electricity distribution, reducing supply losses and increasing service coverage.

In the Water sector:

  • Increase supply of drinking water and drainage capacity.
  • Build flood-protection infrastructure.

In the Communications and Transportation sector:

  • Develop multi-modal transport infrastructure to generate competitive costs, value, improved security, and economic and social development.
  • Modernize passenger mobility in comprehensive, safe, agile, and sustainable ways.
  • Provide better communications access and service coverage to the public.

In the Health sector:

  • Establish inter-institutional health resource planning and management.
  • Consolidate health infrastructure, prioritizing vulnerable-population areas.

The Expenditure

As world demand for products manufactured in Mexico nearly outpaces capacity for production, Mexico is rising to meet the challenge with a detailed improvements plan. And they are putting their money where their mouth is. Mexican infrastructure improvements cost approximately $300 billion USD in the first year. As of 2015, the total value of the infrastructure construction market reached approximately $50 billion USD and is expected to reach approximately $60 billion USD by 2020. Overall, the investment into these infrastructure improvements is expected to ultimately reach $600 billion USD. The country’s aggressive overhaul will ensure a stable Mexican economy and the capacity needed to serve as North America’s manufacturing hub for many years to come.

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This quarterly publication will be populated with content that is useful and relevant to readers that are contemplating Mexico investments, have operations already within the Republic, as well as to other individuals that have an interest in Mexico and its manufacturing sector.