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o: National Infrastructure Program
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Mexico: National Infrastructure Program
2007 – 2012
Adrián Orta, Patrick Hess
August 2007
Summary
On July 18, 2007, Mexico’s President, Felipe Calderon, unveiled his administration’s master infrastructure
development plan – titled the National Infrastructure Program (NIP). The expenditures associated with the
program are to be implemented through the remainder of President Calderon’s term (2007 – 2012); yet, some of
the objectives within the plan have an outlook that extends past this time frame. Depending on whether Congress
approves the current fiscal reform proposal (which will generate the revenue necessary for the NIP), the breadth
of the program may vary significantly. From airports to seaports, there will be many opportunities for U.S.
businesses to become primary/sub-contractors or suppliers to these multi-year infrastructure projects. U.S. firms
interested in learning more about specific upcoming tenders are encouraged to be in touch with the U.S.
Embassy’s Commercial Service, which can arrange appointments with key officials and identify sources of
financing for your U.S. made good or service.
Infrastructure in Mexico: A Need to Reform
Although the last decade has seen some improvements in Mexico’s infrastructure network (especially improved
access to water and sanitation, electricity and telecommunications), Mexico’s infrastructure investment has
continually declined since 1988 – from 7% to 3% of GDP. This has directly corresponded to a drop in Mexico’s
competitiveness with respect to other countries and regions. To be considered a highly competitive country,
Mexico must increase levels of infrastructure development, which over the last five years averaged just 3.2%.
Additionally, when energy related investment is excluded, annual infrastructure investment drops to 1.8% of GDP.
Contrastingly, Chile and China invest 5.8% and 7.3% of GDP respectively in infrastructure. The National
Infrastructure Program aims to avert this trend.
NIP: The Basics
The Calderon administration laid out the three possible scenarios that would determine the extent of the National
Infrastructure Program: “inertia”, “base” and “outstanding”. The
base scenario seems to be the most probable; therefore, many
of the predicted figures given by the administration (and in this
report) are based on these assumptions. The base scenario
requires that Congress pass fiscal reform currently under
scrutiny, and that at least half of the resulting revenue
increases are directed toward the National Infrastructure
Program. The inertia scenario assumes Congress fails to
approve fiscal reform, which would ultimately decrease
infrastructure investment below current levels. Calderon’s
outstanding scenario would see the passage of not only fiscal
reform but also reforms in the areas of labor, energy and/or
telecommunications. Such reforms would increase the amount
of monies available for infrastructure development to levels
higher than that of the base scenario. The table to the left
reveals the primary economic forecasts associated with the
three scenarios of the NIP
1
. Please note that throughout this
report all US dollar conversions were determined using the July
$156.0
2.5%
0.0%
0
$234.8
4.0%
0.6%
720,000
$312.7
5.5%
1.2%
1,440,000
Economic Impacts of Each Scenario
2007 - 2012
Average Annual Investment (% GDP)
Additional Annual Growth (GDP)
Additional Jobs
Total Investment (Billions of USD)
Average Annual Investment (% GDP)
Additional Annual Growth (GDP)
Additional Jobs
Inertia Scenario
Base Scenario
Outstanding Scenario
Total Investment (Billions of USD)
Total Investment (Billions of USD)
Average Annual Investment (% GDP)
Additional Annual Growth (GDP)
Additional Jobs
1
Martínez, Roberto and Vega, Laura. El Economista, “Inversión record en infraestructura, condicionada a la reforma
fiscal” (07/19/2007).

2. Mexico: National Infrastructure Program
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24, 2007 Inter-bank Rate of 10.78282 MXN/USD according to http://www.oanda.com/convert/classic.
Before the end of September 2007, it is assumed that the Mexican Congress will vote on fiscal reforms proposed
by Calderon’s administration, which –if passed– will generate the necessary public financing to fund the NIP.
Assuming passage of the reform, a budget will be drafted to include the NIP and given to Congress once again for
approval. Decision on the budget can be expected by November 15, 2007. Of the more than 250 new
infrastructure projects planned, tenders will become available immediately, so long as the budget is approved, to
Mexican and international firms.
The National Infrastructure Program would increase infrastructure investment by 50% compared to the previous
administration. It is predicted that this extra investment will enable the NIP to place Mexico as a leader in
infrastructure coverage and quality within Latin America –a drastic improvement from their current ranking of 60
out of 125 countries worldwide in infrastructure2
. The NIP also aspires to place Mexico on track to rank in the
orld’s top 20% for infrastructure competitiveness by 2030.w
Sectors Affected by NIP
Of the ten sectors that will have infrastructure investment from the NIP, seven are deemed a priority. As such,
these seven sectors have the most information available regarding projects that are planned or already occurring.
Highlights and details on the major projects in store for each of these seven sectors are given in the following
sections. The table below displays the forecasted financing from both public and private sources that the National
Infrastructure Program will generate over the next five years3
. Note that the sectors highlighted in yellow are the
seven priority sectors addressed previously in this paragraph.
Public Private Total Public Private Total Public Private Total
Agriculture & Flood Control $2.1 $0.7 $2.8 $3.3 $1.1 $4.5 $4.5 $1.5 $6.0
Railways $1.6 $1.3 $3.0 $2.5 $2.0 $4.5 $4.7 $3.8 $8.5
Airports $0.9 $0.7 $1.6 $3.0 $2.5 $5.5 $3.9 $3.3 $7.2
Seaports $0.9 $3.2 $4.2 $1.5 $5.1 $6.6 $2.3 $7.8 $10.1
Potable Water & Sanitation $6.8 $2.9 $9.7 $10.0 $4.3 $14.3 $11.9 $5.1 $17.0
Telecommunications $1.7 $23.9 $25.6 $1.8 $24.5 $26.2 $1.8 $25.3 $27.2
Highways $8.1 $6.5 $14.6 $14.7 $11.9 $26.6 $21.1 $17.0 $38.1
Gas & Petrochemical Refining $17.1 $17.1 $35.1 $35.1 $51.7 $51.7
Electricity N/A N/A $21.4 N/A N/A $35.2 N/A N/A $47.5
Hydrocarbon Production N/A N/A $56.1 N/A N/A $76.2 N/A N/A $99.3
Total Investment $85.8 $70.2 $156.0 $129.1 $105.7 $234.8 $172.0 $140.7 $312.7
Estimated Investment in Infrastructure, 2007 - 2012 (Billions of USD)
Base Scenario Outstanding ScenarioInertia Scenario
Sector
According to the program’s detailed description of the base scenario, roughly 55% of the financing for the entire
project will come from federal, state and municipal sources and the remaining 45% from the private sector . For
the purposes of this report, the percentage breakdowns in the two other possible scenarios are identical. That is,
the inertia and outstanding scenarios have the same public/private percentages overall and for each sector.
These figures cover a great diversity of infrastructure industries and will potentially provide firms with supplier
opportunities worth up to nearly $141B over the next five years. In the following sections, details on each
infrastructure sector are described, including information on recently planned projects as well as projects that have
already commenced.
3
Railways
The plan to expand the current railroad system involves $4.5B of investment over five years. Among other things,
these funds will be used to add 881 miles of railway track throughout Mexico and to expand the suburban train
system in Mexico City. In fact, the Mexico City system will be improved through three projects, one of which will
2
Ramírez, Karla and Hernández, Alma. Reforma, “Alistan infraestructura” (07/18/2007).
3
“Visión de Largo Plano” and “Visión Sectorial”, Programa Nacional de Infraestructura 2007 – 2012.
www.infraestructura.gob.mx.

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be completed at the beginning of 20084
. Collectively, the three projects will benefit 25 million citizens and save a
combined two and a half hours in travel time . As well, there will be an additional ten multi-modal corridors added
to the current eight by 2012. To accomplish these goals, twenty-three work projects have been confirmed and an
additional five are still in the planning phase. Work on ten of these projects has already begun or may begin
before the end of the year. Another four projects are scheduled to follow suit in 2008 .
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6
Airports
The primary project to increase infrastructure in airports is to construct three entirely new commercial airports in
the Mayan Riviera, Puerto Peñasco (AKA Rocky Point) and Ensenada. Thirty-one existing airports will be
substantially expanded, including Toluca, Puebla, Cancun, San Jose del Cabo, Loreto, Nuevo Leon, Monterrey,
Guadalajara and Puerto Vallarta5
. All sixteen of the projects designed to accomplish these developments have
either started or will start no later than 2008. An additional two more expansion projects and a new airport plan (in
Merida) are currently being studied6
.
Seaports
Five new seaports are to be constructed in Bahía Colonet (Baja California), Manzanillo, Veracruz, Seybaplaya and
Puerto Morelos7
. Additionally, twenty-two ports will either be expanded or modernized along the Mexican
coastline8
. The $6.6B in funding, which will come mainly from private investors, will be distributed throughout
seventeen projects, four of which have commenced or will commence operation before 2008. During 2008,
another six projects will be underway. In addition to the seventeen that comprise this sector’s infrastructure
development, seven more are under consideration at the moment .5
Potable Water & Sanitation
Thirty percent of the investment into improving water sanitation will be concentrated in the Valle de Mexico in the
center of the country. The NIP hopes to raise the national level of potable water from 90% to 92%, the treatment
of residual water from 45% to 60% and the amount of drainage from 87% to 88% by 2012. Three new aqueducts
and seven treatment plants will be built. Also, thirteen treatment plants in Acapulco will be modernized and
refurbished9
. Over 50 projects – nearly all starting by 2008 at the latest – will require over $14B in investment to
accomplish the goals set forth .5
Highways
One of the most talked about sectors benefiting from the NIP is that of the highway system. $26.6B will allow for
the construction, modernization and refurbishment of 10,937 miles of highways and rural roads all over Mexico .
More specifically, $14.5B will be for the construction and modernization of 870 miles of highway, $6.2B for routine
maintenance of 27,816 miles of highway and $5.8B for construction and modernization of 1,181 miles of rural
roads
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10
. Over 100 projects, separated into five regions, are either confirmed or currently in action. Of the projects
that haven’t already started, the majority of them are expected to start before or during 2009 .5
Electricity
4
Acevedo, Luis. El Universal, “Plan de Infraestructura no excluye regiones: Luis Téllez” (07/30/2007).
http://www.eluniversal.com.mx/notas/439843.html.
5
Cruz, Lilian and Córdoba, Mayela. Reforma, “Planean 3 aeropuertos” (07/19/2007).
6
“Anexos”, Programa Nacional de Infraestructura 2007 – 2012. www.infraestructura.gob.mx.
7
Barrera, Adriana. Reuters. “México lanza ambicioso plan de Infraestructura” (07/18/2007).
8
Martínez, Roberta and Vega, Laura. El Economista, “Destinarán 2.5 billones de pesos a Infraestructura”
(07/19/2007).
9
Osorlo, Victor. Reforma, “Recicla la Federación proyectos hidráulicos” (07/20/2007).
10
Ramírez, Karla. Reforma, “Reconcesionan vías del Farac” (07/19/2007).

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Electricity infrastructure improvements are to be carried out in projects in generation, transmission and
distribution. Moreover, these categories of projects are broken down further: relating to the country as a whole
and strictly to the central zone of Mexico. Electricity generation has the most resources devoted to it,
encompassing over 60% of the 54 projects. This will be a sector of infrastructure that may require an incredible
$35B for its objectives to be achieved .5
Hydrocarbon Production
Of the priority sectors, the largest investment in the National Infrastructure Program will further develop Mexico’s
capacity for hydrocarbon production. As a major source of revenue to the Mexican government, PEMEX (the
state owned petroleum producer) is in need of investment in the exploration, refining and production (basic
petrochemicals, gas and more complex petrochemicals). More than $76B is earmarked for this cause, which is
broken up into forty projects. Over half of the projects have a planned start dates between 2008 and 2011.
Market Opportunities for U.S. Firms
As a U.S. exporter, it is important to know that many, but not all, of these development projects will be open to
wholly owned international firms. However, strictly national tenders also present potential opportunities for
American firms to partner with local firms. In order to bid a contract that is open solely on the national level,
partnerships can be made with a Mexican counterpart, who must be the majority shareholder.
These Mexican partnerships often prove quite helpful to U.S. firms hoping to succeed in the local market. A
Mexican partner will provide U.S. firms with local experience and expertise, while the U.S. firm will provide new
technologies, techniques and financial support to develop projects.
In order to achieve all objectives set forth in the NIP, the Calderon administration will attempt to use more Public-
Private Partnerships (PPP’s), in addition to traditional concessions, to boost private investment in the plan′s major
infrastructure projects. The main goal of the plan is to improve Mexican infrastructure and make the country more
competitive, using PPP’s as the vehicle.

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For More Information
The U.S. Commercial Service in Mexico City can be contacted via e-mail at: Adrian.Orta@mail.doc.gov; Phone:
(52-55) 5140-2619; Fax: (52-55) 5566-1115; or visit our website: www.buyusa.gov/mexico.
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International copyright, U.S. Department of Commerce, 2007. All rights reserved outside of the United States.
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