VIEW FROM THE TOP
HIGHEST QUALITY, LOWEST PRICE WINS PROJECTS
54
Sergio Montaño Managing Director at McBains Cooper
Silvia Mejía Reza Senior Consultant at McBains Cooper
Q: How are companies in Mexico taking advantage of the
SM: The educational sector creates a wide array of
PPP program?
opportunities, from installation to the formation of other
SM: McBains has participated greatly in the UK health
educational services. Penitentiary systems usually have
sector and looks to do the same in Latin America.
numerous contracts to undertake a variety of services
When the first hospitals were announced under the PPP
and it would be much easier to have one contract that
program, the company participated as a consultant and
integrates services and essential components into one.
intermediary for UK companies. McBains has developed
Contract integration is attractive to companies because it
projects and is increasing its presence in Colombia,
reduces costs, increases profit margins, eliminates overly
Peru, Chile, Uruguay and Brazil. We offer “boutique
complicated processes and increases transparency. It also
consulting” for PPPs in developing countries because
limits constant negotiation between government divisions.
we specialize in this. Q: How will the economic situation and the creation of SMR: The latest changes in Mexican law were made
new investment vehicles impact the development of
to facilitate this process and to increase the number of
general infrastructure?
successful projects. The Ministry of Finance has noticed
SM: In comparison with the rest of Latin America, Mexico
that in some regions, many state authorities interpret
has the highest growth potential and the greatest number
the PPP structure as financing when it should be used
of opportunities as a result of a combination of political,
as a service. The Ministry is trying to regulate these
social and economic factors. For the past few years, Mexico
situations. The projects that win PPPs are often those
has maintained strong fiscal and monetary discipline
offering the highest quality service at the lowest price. In
that has attracted investment. On an international level,
Latin American countries PPPs are still seen as extremely
Mexico has to compete against countries that are not
exclusive structures, while others use PPPs even for small
as dependent on the oil industry and despite the fact
projects. Latin American countries have not reached the
that the drop in oil prices has had a considerable effect
point in which a small level of investment will provide a
on the country, Mexico’s dependency has decreased
wide variety of services.
significantly over time. Authorities have had to implement different strategies such as strengthening fiscal policy
Q: What type of infrastructure could the PPP program
with companies as a way of reducing costs, increasing
facilitate that would have a social impact on Mexico’s
productivity and improving quality of products and
development?
services.
SMR: By looking at the global context we can identify the possible social impacts PPP projects will have in Mexico.
SMR: It is important to pay close attention to how
McBains has been involved in educational infrastructure
investment will flow into the country. The biggest problem
and in Greece it took part in a PPP project for the
in the allocation of funds is that companies create
development of high schools. In Mexico there was a similar
shareholders for each budget and these are normally
project in which construction firm ICA hired consultants
governmental institutions that receive part of the budget,
to create a PPP program for the development of new high
such as unions. When working with unions, a company
schools and the final product was incredible. Prestigious
cannot cut salaries or end contracts because workers
architects like Billy Springal designed beautiful learning
are protected and this makes budgeting less flexible. The
facilities, yet the financial model was not attractive to
financial sector is one of the most modernized sectors in
the private sector due to its simplicity. Nevertheless,
the country and the development of Fibras aspires to make
the private sector could be involved in the surrounding
infrastructure investment more flexible. These financial
services such as parking lots and internal services.
structures are being used as a way to increase the amount