Plans to construct the Isthmus Corridor, a renovation of highway and rail lines between the ports of Salina Cruz, Oaxaca, and Coatzacoalcos, Veracruz, are in full swing following the signing of the Oaxaca Pact August 15.
The pact is an agreement between nine southern Mexican states to work collaboratively with the private sector to create a more prosperous region.
At the event, President Andrés Manuel López Obrador announced that foreign investors are not invited to participate in the developmental process.
“Although there is interest from foreign countries with this project, we want the development of the Isthmus to be by the public sector and Mexican investors, with the participation of the communities,” said López Obrador.
Meant to compete with the Panama Canal, the Isthmus Corridor project would connect the Pacific Ocean to the Gulf of Mexico. With this, will come a surge of economic activity in the impoverished southeastern region of Mexico. By 2021, the vision is that the 309-kilometer rail line connecting Veracruz to Oaxaca will be completely revamped with an initial investment of 3.9 billion pesos. An electric train will be able to transport 300,000 tons of cargo between the two ports in three hours. Another 2 billion pesos would be invested in the two ports for the construction of four new piers in each one. Additionally, the completion and modernization of highways linking the two ports is estimated to cost 12.5 billion pesos.
“There are many comparative advantages,” said Obrador. “We have the geography that helps us and the two ports. They must expand and the infrastructure must improve,” said López Obrador.
A variation of the Isthmus Corridor idea has been floated by every Mexican president since President Diaz Ordaz in 1967. But one part of the plan that may make it viable includes making southeast Mexico an economic “free zone” where tax incentives will expectedly allure businesses.
Not everyone considers this project to be worthwhile. The president of the Mexican Shipping Agents Association does not take the effort seriously.
“The idea of using a trans-isthmus service to compete with the Panama Canal, as has been mentioned on multiple occasions in the past 40 years, is a pipe dream,” said Cristian Bennett Lira. According to Lira, at least 200 trains would need to operate daily between the two ports to keep up with the Panama Canal’s volume.