ROUNDTABLE
IS THERE A LACK OF PROJECTS OR A LACK OF FUNDING?
Fund managers often complain about the lack of viable infrastructure projects in which to invest in Mexico. But the PPP and USP mechanisms have allowed the government to tender more civil works projects, mainly for the road, hospitals and education sectors. With new projects slowly but surely becoming available, developers are voicing concern about a lack of funding that would enable them to use their expertise to bridge Mexico’s infrastructure gap. In light of the undeniable gap in development, Mexico Infrastructure & Sustainability Review asked industry leaders what was the root cause of the country’s underdeveloped infrastructure.
Before institutional investors, projects were funded by whoever would undertake the project, which was not the best scheme. The issue is not that there is not enough money but that managers and developers need to work closer together to complete projects. Nor is there a lack of projects. Projects just need to be put together in a way that they provide certainty to institutional investors that have
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a fiduciary responsibility to more than 10 million workers. For many years, these
JUAN MANUEL VALLE Director General of Afore XXI Banorte
projects were put together and funded by the government but now there are many more opportunities for the Mexican market to grow.
Neither is true. Rather, I believe there is a lack of continuity, and we have not yet managed to accomplish a long-term vision across different governmental administrations in Mexico. In the end, we have projects on hold for several years until somebody restarts work on them. This system could be optimized to boost the development of infrastructure. At the moment, I do not perceive a lack of financing but that has certainly been the case in the past. Another issue is that there are many
DIANA MUÑOZCANO
projects but a shortage of expert professionals to make them viable.
Vice President of Grupo Indi
I do not believe anyone will say that the problem is a lack of funding because Mexico is an attractive market and capital wants to come here for the variety of reasons we discussed. Contrary to popular belief, I do not believe there is a lack of projects. Capital moves faster than projects. In my mind, I do not think there is a mismatch between the two. There is great appetite to enter Mexico and I think we have a large and growing pipeline of infrastructure investment opportunities
JUAN LEAUTAUD Managing Director of BlackRock
to satiate that appetite. It is a wheel that turns faster than it did five years ago and hopefully it will continue turning even faster. I think this education is part of Mexico’s path to growth.
