Last week, Mexican President Andres Manuel Lopez Obrador announced his plans to begin refurbishing an existing military airfield into a commercial airport starting in January
His predecessor Enrique Pena Nieto already broke ground on an airport, but the new president, who just took office Dec. 1, rejected that $13 billion plan after an unofficial vote determined the venture was too costly and built on corruption, Time reported.
He also proposed that the military handle the construction of the project, Reuters reported.
— Reuters Top News (@Reuters) December 20, 2018
The new president has plans to enlarge the Santa Lucia military airport and “run it north of Mexico City’s Benito Juarez International Airport,” Reuters reported. Lopez Obrador believes this will solve the problem the airport currently has with mass congestion and travel problems.
In March, he also plans to add a third runway after an analysis determines where it would be best situated.
During a press conference, Lopez Obrador said, “It includes, immediately, the construction of a new runway. It includes the construction of the terminal and a connecting road from the current airport to Santa Lucia, as the three big pieces of the whole project.”
Lopez Obrador said the cost of the project has already been calculated into the budget for 2019.
There was an issue with bonds that were allocated for the project under the former president.
In early December, it was reported that Mexico presented a plan to rebuy some of the bonds that are valued at $6 billion but at that time the offer was turned down.
Moody, a ratings agency, has since upgraded the bond rating forecast to “stable” from “under review.”
Another ratings agency, Fitch Ratings, did not offer the same forecast. They lowered their aspect of the rating to negative, anticipating that the new project would cut profits and increase expenses.
Neighboring businesses lean toward Fitch Ratings’ forecast, arguing that the airport’s proximity to the capital would cause a problem for flights trying to connect from Mexico City.
Specialists in the engineering field are confident that the president’s new project plan will meet serious challenges in terms of flight paths.
Lopez Obrador said that issues have since been resolved.
Last week, the Finance Ministry said, “this time there was ‘overwhelming’ acceptance by bondholders, which will allow the government to avoid a mandatory repayment of all $6 billion in bonds that would have been triggered by the cancellation of the airport,” according to Bloomberg.
“It is a step in the right direction. AMLO had a poor start in terms of creating confidence. He did not appear to show leadership on key issues, but after the budget and now this airport bond dispute he is winning back some trust,” said Jan Dehn, the head of research at Ashmore Group Plc in London.