INTERNATIONAL IDEA EXCHANGE

Infrastructure capital investments in Mexico

Bernardo Garcia, P.E.
Director of Public Works
Hillsborough County, Florida

Anyone who has watched a convoy of eighteen-wheelers running heavy down the Interstate, or has waited at a crossing as an engine passed pulling a hundred loaded freight cars, understands the importance of transportation infrastructure to commerce. Without an effective system of roads, railroads, ports and airports to support it, the economy of any country cannot flourish in our increasingly intermodal world.

And that, in a nutshell, is the challenge facing the Republic of Mexico today. On the one hand, its economy is steadily improving, thanks in no small part to the North American Free Trade Agreement (NAFTA). Its strategic location as a bridge among North, Central and South America provides Mexico with a unique geographic advantage in the surface movement of goods among them. Mexico is already among the world's top fifteen economies, with a Gross National Product of over $480 billion and foreign trade of over $275 billion annually. Foreign investment reached record highs last year at close to $24 billion. Interest rates have decreased from 18 percent to 6 percent; inflation has decreased from 9 percent to 4.4 percent. Unemployment decreased by 2.5 percent last year. Foreign tourism has increased by over 8 percent since 2000 already. The International Monetary Fund has offered Mexico a line of credit reserved for countries that demonstrate responsible economic management. In other words, Mexico is well on its way toward having a world-class economy.

However, Mexico will reach that goal only when significant improvements have been made to its transportation infrastructure. Entering 2001, Mexico had over 333,000 kilometers of roads and highways maintained by the federal government. Of those, only 6,000 kilometers, or less than 2 percent, are included in the newer and better toll roads, while nearly 20 percent are rural, largely unpaved roads leading to and from smaller communities. The federal government maintains that network of highways, which handle the largest passenger and cargo traffic between cities, and national as well as foreign commercial transportation. State roads link agricultural lands to major highways and integrate the Mexico's regions. Rural roads are important in that they are often the only means of access to many small communities. Many areas still remain isolated.

Other modal infrastructure includes 26,655 kilometers of railways, 108 ports and maritime terminals, and 1,215 airstrips, of which 85 are public airports. These are not large numbers for a country that spans nearly 2,000,000 square kilometers and supports a population of 100,000,000 people. Moreover, the existing transportation infrastructure was largely built without consideration of how to transfer goods easily among truck, rail, marine and air transportation. Transfer costs are therefore often expensive, adding to the final price that must be charged and, as a result, reducing the ability of Mexican manufacturers to compete in the global market.

In the past two years, the Mexican government has been taking bold steps to improve this situation. President Vicente Fox, in his National Development Plan for 2001-2006, has stated that a strong transportation program is an essential factor in achieving both prosperity and social welfare. Among the goals of the National Development Plan are the responsible management of the Mexican economy, increased productivity, uniform economic growth across Mexico's regions, and protection of the environment while doing so. The National Development Plan was developed with public input in the areas of communication and transportation. During March 2001, 33 focus groups convened, one in every state of the Republic, and two in the Federal District. The more than 6,400 citizens who participated in this effort represented diverse social groups, economic sectors, and educational backgrounds.

Implementation of the National Development Plan has required both unprecedented cooperation among Mexico's political parties and profound legal and institutional structural reform in the government. No political party enjoys majority control, and therefore must cooperate and compromise to achieve important goals. Several recent legislative initiatives have been unanimously passed, including landmark enhancements for combating corruption and increasing government accountability, such as open meetings laws. More importantly, the federal government has now strengthened the authority of states to deal with infrastructure projects. This new strategy with respect to communications and transportation has curtailed isolated regional actions in favor of an integrated vision where the efforts of the private and public sectors are focused and coordinated. As part of this new strategy, an integrated intermodal system is being promoted in order to compete in the international arena.

The estimated cost to construct and adequately maintain highways during the six-year National Development Plan is 178,750,000 pesos. To achieve that level of funding, the federal government is actively encouraging private investment in infrastructure development, which has been made more likely with the significant reduction in interest rates. For example, the federal government has increased its annual subsidy to the National Finance Credit Agency by eight billion pesos. In other actions, the Department of Communication and Transportation will allocate 3,600,000 pesos to improve the highway infrastructure along the northern boundary with the United States. The project will eliminate congestion and will increase the capacity and efficiency of border points in order to expedite movement of international cargo, passengers, vehicles, and merchandise. The physical capacity of existing ports will be increased, additional ports will be constructed and intelligent transportation system technology will be added to improve efficiency. Major highways used for national commerce will be consolidated, and the existing infrastructure will be widened to solve the congestion problem in border towns and cities. Highway safety will also be improved. Where highway segments are being used beyond their intended capacity, which was calculated 30 to 40 years ago, accidents occur. Over 2,000 of these locations will be improved during President Fox's term, at a cost of over 1.4 billion pesos.

Since NAFTA became effective, manufacturing production along the border between Nuevo Laredo and Laredo in west Texas has grown dramatically. If linked with the manufacturing Mecca in Monterey, Mexico to the south, a major commerce corridor would be created, and result in the need for a highly technical intermodal transportation corridor. Ideally, the corridor could continue to the Pacific Coast linking to the states of Michoacan and Guerrero. Guerrero already boasts highly technical highway infrastructure. That corridor could then be linked to the north to achieve better flow of goods and services between the western states of Mexico and the border states of California, Arizona and New Mexico.

Mexico is moving in the right direction toward developing an integrated, intermodal transportation system that enhances rather than inhibits the growth of Mexico's economy. As that system becomes fully implemented, Mexico's commerce with its neighbors, and the rest of the world, should grow rapidly.

To reach Bernardo Garcia, call (813) 307-1700 or send e-mail to GarciaB@hillsboroughcounty.org.

INTERNATIONAL IDEA EXCHANGE

Strengthening international ties: APWA delegation attends public works conference in Pachuca, Mexico

Bob Kass
Public Works Director
City of Campbell, California

A 13-member APWA delegation, headed by President Richard Ridings, recently attended the 9th Annual Association of Mexican Municipalities (AMMAC) Public Works and Services Conference, which was held in Pachuca, Mexico this past May.

The two-day conference, which draws public works professionals and elected officials from throughout Mexico, included technical sessions, a trade exposition, and networking events that focus on improving the delivery of public services in Mexico's rapidly changing political landscape. The annual conference also provides an opportunity for members of the APWA/AMMAC Task Force to renew friendships and review progress on the Task Force's many work program items.

APWA President Richard Ridings took part in the opening ceremonies, along with the Governor of the State of Hidalgo, Manuel Angel Nuñez; Pachuca Mayor José Antonio Telleria Beltrán; AMMAC President and Mayor of Guadalajara Fernando Garza Martinez; and Marco Alvarez Malo, Mayor of the City of Metepec from the neighboring state of Hidalgo.

Several of the members of the APWA delegation had an opportunity to participate in technical panels that offered North American perspectives on public works and public services issues. José Gamboa from the City of Santa Cruz, California shared his community's experiences with financing solid waste collection and recycling programs. Cruz Gonzalez and Julio Fuentes from the City of San Diego participated in a panel on transportation, presenting a primer on transportation management at the state and local levels. Irma Myers and Rudy Olivas of Yuma spoke on asphalt recycling; Bernardo Garcia, Eduardo Tapia and Genaro Perez-Rocha of Hillsborough County, Florida presented their department's experience with asset management and service delivery; and Bob Kass of Campbell, California took part in a panel discussion on municipal development and the delivery of public services. Finally, Bill Clevenger from Geocon, a San Diego consulting firm, provided some thoughts on public works and services from a private sector perspective.

Former APWA President and current International Affairs Committee Chair Jerry Fay participated in the closing ceremonies with AMMAC Executive Director Oscar Vega Marín, where highlights of the APWA/AMMAC partnership were presented, including plans to provide Spanish translation of some sessions at the 2003 San Diego Congress; marketing the San Diego conference throughout Latin America; and the potential translation of selected APWA publications for distribution at the upcoming 2002 Kansas City Congress.

Material in Spanish on the Kansas City 2002 Congress was also provided to attendees with their registration materials, along with selected information on APWA membership and publications.

Special thanks to Julio Fuentes, IAC member and APWA/AMMAC Task Force Chair for coordinating APWA's participation in this year's AMMAC conference.

To reach Bob Kass, call (408) 866-2150 or send e-mail to bobk@ci.campbell.ca.us.

INTERNATIONAL FACTS/PROVERBS

The Slovak Republic
The official name of Slovakia is the "Slovak Republic" (Slovenska Republika). Although there were elements in the Czechoslovak leadership that resisted the breakup, Slovakia seceded from Czechoslovakia in 1993. Since this secession was done by wholly peaceful means, it is referred to as the "Velvet Divorce."

The Slovak Republic has a population of approximately 5.5 million and has a literacy rate of 99.52 percent. By comparison, the literacy rate in the United States is 98.79 percent.

Capital: Bratislava

Bordering Countries

  • Austria, Czech Republic, Hungary, Poland, The Ukraine
Monetary Unit: Slovenska koruna (Slovak crown)

Chief Crops

  • Wheat, rye, corn, potatoes, sugar beets
Major Industries
  • Brown coal mining, chemical metal working, consumer appliances, fertilizers, plastics, armaments
"Ask the experienced rather than the learned." — Arabic Proverb

"Be not afraid of growing slowly, be afraid only of standing still." — Chinese Proverb

"Don't empty the water jar until the rain falls." — Philippine Proverb