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Mexico Infrastructure Report Q2 2011

Mexico Infrastructure Report Q2 2011

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Additional Information

Price	$530.00
Publisher	Business Monitor International
Date of Report	Apr 8, 2011

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Quick Overview

BMI View: Planned investments in roads and water infrastructure will drive Mexico's infrastructure industry value in 2011. Examining the pipeline of planned projects we note that roads will continue to dominate the country's infrastructure sector in the coming years. Local and international utilities will also find several opportunities to enter Mexico's water sector, now that Conagua is keen to implement the Atotonilco public private partnership (PPP) model to expand and renew water infrastructure throughout the country. The revival in overall construction activity over the second half of 2010 continued in Q111, prompting an above-consensus forecast for construction industry value growth.
?? The Punta Colonet port seems to be on the Mexican government's agenda once again, with 2011 set as the date for this highly elusive tender. Three years after the tender was first launched, and subsequently abandoned, the move to revive the project indicates to BMI that the government is convinced investor sentiment is bullish enough to garner interest in what could be one of the largest tenders in the Latin American infrastructure space. We remain cautious. While we believe more interest will be registered in 2011 than in 2008, we are cautious about the extent to which it will match the government's expectations of a US$3bn commitment by the private sector.
?? Japanese utilities and engineering companies are increasing their foothold in Mexico’s utilities sector with the support of Japanese public institutions such as the Japan Bank for International Cooperation (JBIC). With the addition of Gas Natural's assets in Mexico (October 2010), Mitsui is becoming one of the largest investors and operators in Mexico's utilities sector.
?? Revised historical data series dating back to 2003 indicate a much more robust construction sector in terms of industry value than previously estimated. Mexico’s construction industry value in 2009 was MXN797bn (US$59bn), compared to the previous estimate of MXN556bn (US$41bn). Low base effects from 2010 will accentuate industry value growth in 2011, which will in turn moderate from 2012 onwards, in line with BMI’s forecasts of a deceleration in gross fixed capital formation (GFCF) real growth.
?? Over the final months of 2010 the wind power sector saw a plethora of investment pledges for large scale capacity projects. Spanish Gamesa and Eolia Renovables de Inversiones made the largest investment pledge, with plans announced in December 2010 for the development of wind farms with combined capacity of 324MW over 2011 and 2013.

Table of Contents

Executive Summary ........................................................................................................................................ 6
SWOT Analysis ................................................................................................................................................ 7
Mexico Infrastructure SWOT ................................................................................................................................................................................ 7
Mexico Infrastructure Project Finance SWOT ...................................................................................................................................................... 7
Mexico Economic SWOT ...................................................................................................................................................................................... 8
Mexico Political SWOT......................................................................................................................................................................................... 8
Market Overview .............................................................................................................................................. 9
Building Materials ......................................................................................................................................... 11
Global Materials ...................................................................................................................................................................................................... 11
Building Materials: Global Demand to Hit New Highs In 2011 .......................................................................................................................... 11
Asia to accelerate in 2011 ................................................................................................................................................................................... 11
Table: World's top steel producing countries (million metric tonnes – mmt) ....................................................................................................... 15
Latin America .......................................................................................................................................................................................................... 16
Industry Forecast .......................................................................................................................................... 20
Table: Mexico Construction And Infrastructure Industry Data ........................................................................................................................... 20
Table: Mexico Construction And Infrastructure Industry Data ........................................................................................................................... 22
Construction And Infrastructure Forecast Scenario ................................................................................................................................................ 24
Transport Infrastructure ............................................................................................................................... 27
Table: Mexico Transport Infrastructure Industry Data ...................................................................................................................................... 27
Table: Mexico Transport Infrastructure Industry Data ...................................................................................................................................... 29
Transport Infrastructure Forecast Scenario ............................................................................................................................................................ 31
Table: Federal Investments in Transport, MXNbn .............................................................................................................................................. 32
Transport Infrastructure Overview .......................................................................................................................................................................... 33
Major Projects Table – Transport ...................................................................................................................................................................... 36
Table: Major Infrastructure Projects – Transport .............................................................................................................................................. 36
Energy And Utilities ...................................................................................................................................... 38
Table: Mexico Energy and Utilities Infrastructure Industry Data ....................................................................................................................... 38
Table: Mexico Energy and Utilities Infrastructure Industry Data ....................................................................................................................... 40
Energy And Utilities Infrastructure Forecast Scenario ............................................................................................................................................ 42
Table: Federal Investments In Utilities, MXNbn ................................................................................................................................................. 42
Energy And Utilities Infrastructure Overview .......................................................................................................................................................... 43
Major Projects Table – Energy And Utilities ........................................................................................................................................................... 46
Table: Major Infrastructure Projects – Energy & Utilities ................................................................................................................................. 46
Residential/Non-Residential Construction and Social Infrastructure ...................................................... 50
Table: Mexico Residential and Non-residential Building Industry Data .............................................................................................................. 50
Table: Mexico Residential and Non-residential Building Industry Data .............................................................................................................. 50
Residential/Non-Residential Construction Forecast Scenario ................................................................................................................................. 51
Residential/Non-Residential Construction and Social Infrastructure Overview........................................................................................................ 52
Residential/Non-Residential Construction and Social Infrastructure .................................................................................................................. 55
Business Environment ................................................................................................................................. 56
Mexico Business Environment ................................................................................................................................................................................. 56
Rewards .............................................................................................................................................................................................................. 56
Risks ................................................................................................................................................................................................................... 56
Regional Overview .............................................................................................................................................................................................. 57
Americas Infrastructure Business Environment Ratings ..................................................................................................................................... 57
Table: Americas Infrastructure Business Environment Ratings ........................................................................................................................... 58
Project Finance Ratings ............................................................................................................................... 62
Mexico Project Finance Ratings .............................................................................................................................................................................. 62
Design And Construction .................................................................................................................................................................................... 62
Commissioning And Operating ........................................................................................................................................................................... 62
Overall Project Finance Rating .......................................................................................................................................................................... 62
Regional Overview ................................................................................................................................................................................................... 63
Project Finance Ratings: Outlook For Americas ................................................................................................................................................ 63
Table: Design And Construction Rating ............................................................................................................................................................. 65
Table: Commissioning And Operating Rating .................................................................................................................................................... 67
Table: Overall Project Finance Rating ............................................................................................................................................................... 70
Macroeconomic Outlook ............................................................................................................................... 71
Growth To Exceed 4.0% In 2011 ............................................................................................................................................................................ 71
Table: Mexico – Economic Activity; 2006-2015 ................................................................................................................................................. 73
Political Outlook ............................................................................................................................................ 74
Long-Term Political Outlook .............................................................................................................................................................................. 75
Domestic Politics ................................................................................................................................................................................................ 78
Company Monitor .......................................................................................................................................... 80
Cemex ................................................................................................................................................................................................................. 80
Empresas ICA ..................................................................................................................................................................................................... 82
Global Overview ............................................................................................................................................ 86
Table: BMI's Core Views For Global Infrastructure .......................................................................................................................................... 93
Methodology .................................................................................................................................................. 94
Industry Forecasts ................................................................................................................................................................................................... 94
Construction Industry ......................................................................................................................................................................................... 95
Data Methodology .............................................................................................................................................................................................. 95
New Infrastructure Data Sub-sectors .................................................................................................................................................................. 95
Construction ....................................................................................................................................................................................................... 97
Capital Investment .............................................................................................................................................................................................. 97
Construction Sector Employment ........................................................................................................................................................................ 98
Infrastructure Business Environment Rating ........................................................................................................................................................... 99
Table: Infrastructure Business Environment Indicators ....................................................................................................................................100
Project Finance Ratings .........................................................................................................................................................................................101
Table: Design And Construction Phase .............................................................................................................................................................102
Table: Commissioning And Operating Phase – Commercial Construction ........................................................................................................103
Table: Commissioning And Operating Phase – Energy And Utilities .................................................................................................................104
Table: Commissioning And Operating Phase – Transport .................................................................................................................................105
Sources ...................................................................................................................................................................................................................106