When explorers first reached Mexico’s Pacific Ocean coastline hundreds of years ago, the region became the bridge between the European and Asian continents. With growing government and private investments in the transportation sector and rapidly expanding rail networks, the coast-to-coast link is shaping up to become an increasingly important global trade route.
In addition to the construction or modernization of more than 18,500 kilometers of roads and highways, one of the most significant projects carried out through the partnership of the Secretariat of Communications and Transportation (SCT) and a handful of private actors is the Baluarte Bicentennial Bridge, inaugurated in January 2012. The $159 million bridge connects the coastal port of Mazatlán and the city of Durango by road for the first time. Initial estimates expect 2,000 vehicles per day to use the bridge when it opens to the public in mid-2012. “The Durango-Mazatlán highway, a 230-kilometer road, is one of our main road projects. It consists of a new 75-kilometer segment that forms part of a corridor linking Mexico’s Pacific and Atlantic coasts,” Dionisio Pérez-Jácome Friscione, the Secretary of Communications and Transportation, told TBY. The highway “reduces travel times up to six hours for freight vehicles and 2.5 hours for private cars.” With 230 kilometers, 115 bridges, and 61 tunnels, the highway is one of country’s main road projects, and requires $1.5 billion of investment to become reality.
As one of the most isolated regions of the country, authorities expect that the highway and bridge will boost trade and tourism in the area. According to officials in Pueblo Nuevo Municipality, the new bridge and highway will improve security along its route by attracting more traffic and activity to the area and promote economic development. Moreover, the state government of Durango has unveiled plans to establish a 1,700-hectare industrial park adjoining the highway. “There will be a lot of investments in dry customs [in Durango], where logistics companies will build huge hubs ready to store dry goods and redistribute them to the north. Mazatlán needs a larger seaport… the government should invest around $10 billion in the harbor, and build new facilities that can handle imports from Asia,” Federico Martínez Urmeneta, President of Tradeco, told TBY. In addition to the 2,500 workers on-site, the highway and bridge project is reported to have created 3,500 jobs directly and 12,000 indirectly.
However, roads and highways are not the only method of criss-crossing the country. Since the railway industry was privatized in 1997, large and small players have rushed in to gain concessions on the valuable network, parts of which connect the Gulf of Mexico and the Pacific Ocean to the US and Guatemala. Two companies, Kansas City Southern of Mexico (KCSM) and Ferromex, have dominated the coastal rail networks, with a 61.3% and 38.7% share of international business, respectively,
As the first company to create a rail link between the central and eastern US and the Pacific Ocean, the Mexican Pacific Ocean, and Asia, KCSM was fortunate enough to receive the concession from the border of Texas to Topolobampo. Over the past 14 years, the company has invested approximately $3 billion in the development of its rail network in Mexico. “The idea was for our railroad to carry freight from Asia through Mexico by rail to the US,” José Zozaya, President and Country Representative for KCSM, told TBY.
Ferromex’s Pacífico Norte line has five gateways into the US. In addition, the company operates four different ports on the Pacific coast, and two vital ports on the Gulf of Mexico. Rogelio Vélez, Director General of Ferromex, told TBY that “we have capitalized on these strengths, and currently we cover more that 80% of the country’s industrial activity.” Vélez explained that container transportation, the sector that has registered the most important annual growth over the last two years, represents 25% to 30% of trade volume for the country.
Ferrosur, owned by Grupo México, operates the key rail connection between Mexico City and Mexico’s busiest Gulf of Mexico and Atlantic port, Veracruz. Through a merger with Ferromex, the company is also responsible for the transportation of cargo across the Isthmus of Tehuantepec, which is the shortest distance between the Atlantic and Pacific oceans.
Improving infrastructure in these key regions is viewed by many as a reflection of Mexico’s progress in unification and coordination. As President Calderón noted at the inauguration ceremony of the Baluarte Bridge, the country’s infrastructure links more than communities and cities; it contributes to the development of stronger economic and political ties for years to come.
© The Business Year