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Scrapping new Mexico Airport project would cost USD 6.6 bn

CEO of the firm overseeing the project said with the project coming close to its halfway point by year's end, the cancellation cost would be about 120 billion pesos (USD 6.6 billion).


Scrapping new Mexico Airport project would cost USD 6.6 bn
Last week's raise of 30 billion pesos in an investment trust to fund construction underscores investor faith. (Image Credit: Wikimedia)

Cancelling the new Mexico City airport would cost about half its USD 13 billion budget, the head of the company in charge of the project said on Monday following threats by the presidential election front-runner to scrap it.

Federico Patino, the chief executive officer of Grupo Aeroportuario de la Ciudad de México (GACM), the firm overseeing the project, said with the project coming close to its halfway point by year's end, the cancellation cost would be about 120 billion pesos (USD 6.6 billion).

"There will surely be lawsuits and damages with penalty clauses ... and if we add this to the unfortunate cancellation of the labour on top of severance costs ... the figure that we have is around 120 billion pesos," he told a news conference.

The leftist who is leading opinion polls for the July election, Andres Manuel Lopez Obrador, has threatened to abandon the airport. Last week he said he would file legal challenges to block future work, lashing out at the project as "corrupt."

However, he since softened his stance, calling for a thorough review of the project and offering to send members of his National Regeneration Movement (MORENA) party to meet with the private sector and government experts.

Mexican President Enrique Pena Nieto would consider an invitation if offered, his spokesman Eduardo Sanchez told reporters, but will not halt construction while his administration sees out its term through November.

Sanchez said aviation experts have deemed Lopez Obrador's proposal to operate a small airport north of the city along with the current facility infeasible and added that operating two connection hubs instead of one would hurt tourism.

"Canceling the new airport project would be outrageous," Sanchez said.

GACM's Patino dismissed suggestions that the airport was tainted by corruption and said that it was being built in accordance with high transparency standards.

"It's a glass box through which any citizen can see what's happening in real time," he said.

He also said the project is on track for a 2020 deadline with 45,000 current employees, a figure set to eventually grow tenfold.

Last week's raise of 30 billion pesos in an investment trust to fund construction underscores investor faith, Patino added.

Funds controlled by Mexican billionaire Carlos Slim's family are set to acquire a chunk of that trust, boosting a project in which Slim's construction companies hold some of the largest contracts.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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