Mexico’s incoming president says he’ll cancel partially built $13-billion airport

Reporting from Mexico City â€”  Buoyed by the results of a controversial nationwide referendum, Mexican President-elect Andres Manuel Lopez Obrador said Monday that his administration will cancel construction of a partially completed, $13-billion international airport and instead move forward with plans for a less expensive alternative.

“The decision is to abide by the mandate of citizens,� the president-elect, who assumes office on Dec. 1, said at a news conference. “This is democracy.�

The revised plan, he said, would save Mexican taxpayers the equivalent of more than $5 billion.

But abandoning the new airport in the Texcoco area northeast of Mexico City also means the loss of some $5 billion that already has been spent on the project. The airport in Texcoco, which would have been the third largest commercial airport in the world, is about one-third complete.

Mexico will instead proceed with a less ambitious scheme that involves construction of a new commercial airfield, including two runways and a terminal, at the Santa Lucia military base north of the capital, Lopez Obrador said.

The pared-down blueprint also includes upgrading Mexico City’s existing Benito Juarez International Airport — which has long operated beyond its capacity — and expanding an under-utilized airport in the city of Toluca, about two hours’ drive from the capital.

The entire modified project — including rail connections between the various airfields — should be completed in three years, the president-elect vowed, and will resolve the gridlock at Mexico City’s over-burdened current airport.

The partially built airport at Texcoco.

(Miguel Tovar / AP)

The Mexican peso began sliding against the U.S. dollar as word of the Texcoco airport cancellation circulated, approaching the 20-pesos-to-the-dollar mark, long viewed in Mexico as key psychological barrier.

Lopez Obrador was defiant Monday when asked about his decision’s potential impact on Mexico’s financial markets and business interests. In his administration, he said, no “pressures� would be tolerated from economic elites.

“What I would say to those corrupt businessmen and contractors is that they get used to it, that they take a mental exercise, an exercise in adaptation,� the president-elect said, a day after voters rejected the Texcoco project. “The decision that the citizens took yesterday is rational, democratic and efficient.�

The new plan puts Mexico’s new leftist president at odds with much of the country’s business and investor community, which largely backed completing the Texcoco project. Supporters said the expansive facility planned for Texcoco would draw additional visitors, investment and businesses to Mexico, while providing a vital transport hub. Backers of Texcoco have also raised doubts about the viability of the planned airfield at the military base.

“This… doesn’t improve confidence and certainty, which are fundamental elements for investment and the creation of jobs,� Alejandro Ramirez, president of the Mexican Business Council, said during a news conference criticizing the cancellation of the Texcoco airport plan. “This decision puts in doubt the possibility of having a true [airport] hub.�

But critics had assailed the Texcoco project as a corruption-plagued boondoggle and environmental calamity for the dry lake bed where the facility is being built.

The president-elect’s decision was anticipated after Mexicans voted overwhelmingly in a four-day referendum, or “consultation,� to scrap the Texcoco airport and pursue the more economical option.

Critics called the referendum a farce engineered by Lopez Obrador, who has long assailed the Texcoco project as too costly and laden with corruption.

Slightly more than 1 million people voted in the four-day referendum, which ended on Sunday. By contrast, more than 56 million Mexicans voted in last July’s national elections, in which Lopez Obrador won a landslide victory.

About 69% of voters rejected the Texcoco airport and favored the less grandiose alternative that the president-elect has now embraced. Only 29% of voters favored completing construction of the Texcoco project.

For more than a decade, Mexican officials have grappled with plans for an alternative to Mexico City’s Benito Juarez International Airport, which serves some 47 million passengers annually, almost 50% more than its designed capacity, according to a study released in April by the International Air Transport Assn., an airline trade group that backs the Texcoco project. Residential tracts now surround the airport, leaving no room for expansion.

The Texcoco airport has been under construction since 2015, with at least an additional three years of work projected until completion. Its price tag has risen from an initial estimate of $10 billion to more than $13 billion.

Mexico will guarantee the contracts of the major companies and investors in the Texcoco airport, the president-elect said. Contractors would be asked to switch their labors to the airfield now planned for the military base, he added. The new government would be prepared to meet any legal challenges to its revamped plan, he said.

The Texcoco site will now likely be converted into an eco-friendly park and sports complex, the president-elect said.

There was no immediate reaction from the Texcoco project’s major builders, among them a construction firm owned by billionaire Carlos Slim, Mexico’s richest man. Slim’s son-in-law, Fernando Romero, is one of the architects of the futuristic new airport in Texcoco.

But a business group said in a news conference that construction at Texcoco would continue until at least Nov. 30, the last day of the administration of Mexican President Enrique Peña Nieto. The Texcoco airport is the outgoing president’s signature infrastructure project.

The Times’ Cecilia Sanchez contributed to this report.

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UPDATES:

1:51 p.m.: The article was updated with President-elect Andres Manuel Lopez Obrador vowing to cancel a $13-billion airport project and further reaction.

This article was originally published at 12:35 a.m.