To Build Or Not To Build: The New Mexico City Airport

March 29, 2018 By 0 Comments

The political news this week has all been centered on the new, Norman Foster-designed international airport for Mexico City, currently under construction. What’s so political about an airport, you may ask? Answer: a whole lot. This was supposed to be Peña Nieto’s legacy project, the public work that would define his administration for decades to come. But as it won’t be complete by the time he leaves office – construction, in fact has barely begun – the new president will have a huge say about the shape of the project…or whether it even goes forward at all.

And here’s where it becomes a campaign issue as large as its price tag: some $13 billion US and counting, already at least 10% over budget with construction only about 15% advanced. Although it is supposed to open its doors to the public as early as 2020 (an unlikely date), completion of the full two stages of the airport isn’t scheduled to be completed until 2065. Already, it is mired in problems. As Andrea Navarro writes on Bloomberg Politics: “A rail line designed to ferry materials is late. So is one of the runways. A key contractor filed for bankruptcy, the project coordinator sued the airport operators and a bridge linking up to a highway collapsed in [September’s] earthquake.”

But the problems with the airport go well beyond the construction bloopers. For starters, the airport is being plunked down on top of a lake bed in Texcoco, which means its soil is subject to up to 40 centimeters a year of sinking (just visit the historic center of Mexico City if you want to see what building on a lake bed looks like). Already, massive hydraulic works have been required just to be able to lay the foundations. This wet area is also home to some 120,000 migratory birds and is vital for absorbing the water necessary to prevent Mexico City from flooding. Of course, the airport will require enormous amounts of water itself, which, ironically, is likely to cause the soil under its foundations to sink still further. It goes without saying that the area is also a severe seismic zone.

What is more, because of air traffic patterns, the new airport will require that the city’s other two airports – the Benito Juárez airport currently in use and the military airport in Santa Lucía – close completely. As visitors to Mexico will be aware, Terminal 2 of the Benito Juárez airport was opened barely a decade ago, in 2007; even more recently, in 2015, a new, billion-peso hangar was built to house the president’s new luxury jet. All of that investment stands to be lost.

The airport project has a long and bloody history: the land was originally expropriated by Vicente Fox, and when the residents of the nearby town of San Salvador Atenco opposed the project, they were brutally repressed by the same Enrique Peña Nieto in 2006 when he was Governor of the State of Mexico. Dating back to Fox’s time, Peña’s group of political cronies, known as the Atlacomulco group, has significant financial interests in the project. And the stink of corruption is already rising up from the lake bed: just this week, the news site Arestegui Noticias broke the story that the perimeter wall, constructed by the Secretary of Defense, was inflated to 89% of its original cost with the help of two phantom companies.

To add insult to injury, it has emerged the airport is to be partly financed by the pension plans of Mexican workers. Mexico’s pension system was privatized in 1997, and workers now receive individual retirement accounts, whose funds are invested in stock markets and other projects. Four of these pension funds recently scooped up 45% of the recent debt offering for the airport, and now hold 10% of the airport investment as a whole. In a recent public appearance with journalist Adela Micha, Peña Nieto openly played the blackmail card: kill the airport project and you’ll be gutting the retirement savings of Mexican workers. The cartoonist Hernández grimly summed up the situation in the following political cartoon, entitled: “You can’t have everything.” “The only bad thing,” says the worker-turned-skeleton, “is that, when I retire, I won’t have my AFORE money to be able to use the new airport and travel the world.”

Faced with all of this, Andrés Manuel López Obrador has adopted a strategy similar to the one I discussed in my previous blog regarding the privatization of PEMEX: ‘let’s review the contracts’. AMLO has made no secret of his opposition to the new airport: his alternative plan is to keep both current airports operating while adding two new runways to the Santa Lucía airport, making it fit for both military and commercial use and saving, he contends, $200 billion pesos in the process. But instead of coming out and declaring that he will cancel Peña’s pet project outright, he speaks in the language of going over the contracts and cancelling those which entailed corruption – a pretty safe bet to find. In an appearance before Mexico’s business body the CCE, he even offered to convene a panel of specialists to study the viability of the airport: five to be appointed by the government, five by his movement, and five by the business community. He has even taken great pains to say that no investor will lose out if the project is cancelled. Another example of the hyper-pragmatism that has marked AMLO’s third presidential campaign, in this case giving every appearance of reasonableness and even out-flanking the right by opposing wasteful spending and government boondoggles.

This has not, however, stopped his opponents, José Antonio Meade and Ricardo Anaya (who both favor proceeding with the airport), from attempting to use the issue as the first cudgel of the three-month campaign season to come. Both have spoken in the language of “obeying the rule of law” and “honoring contracts” in the clear attempt to paint AMLO as a reckless autocrat-in-making who cannot be trusted by business…or anyone else. But it is hard to see how the “rule of law” argument will prevail if the public fails to see much in the way of law regulating the airport project up to now. What remains to be seen is if AMLO will have the mettle, if elected, to follow through with cancelling it. Between that and PEMEX, he would be fighting powerful enemies on several fronts.