Slim bidding for US$1.56 billion Mexico City runway contracts

Carlos Slim's construction arm has teamed up with three local builders to bid for two runways for Mexico City's new airport worth a combined US$1.56 billion, sources say, seeking to snap up major infrastructure projects that survived government cuts.

Carso Infraestructura y Construcción, which is part of Slim's Grupo Carso, has agreed to form a consortium with Grupo Gia, Promotora y Desarrolladora Mexicana (Prodemex) and Grupo Hermes, according to four people who declined to be named since the information was not public. The new airport, President Enrique Peña Nieto's landmark infrastructure venture, is aimed at turning Mexico City into a major regional hub that handles around 50 million passengers a year from 2020 when it is slated to open.

Grupo Carso, Prodemex, Grupo Hermes and Grupo Gia declined to comment.

The airport project has survived even as the government has announced successive budget cuts to confront declining oil revenue, including the cancellation of two passenger train projects last year.

One of the train projects, won by a Chinese-led consortium that included Gia and Prodemex, became a major scandal for Peña Nieto after it emerged that another consortium member, Grupo Higa, owned a luxury home the first lady was acquiring.

On Friday, the Finance Ministry announced further budget cuts for this year in the wake of Britain's vote to exit the European Union.

According to the sources, each company will have a 25 percent stake in the consortium, which will submit separate bids for the first two out of three initial runways to be put out to tender. Eventually, the airport could grow to six runways.

A separate source said each runway is forecast to cost around 15 billion pesos (US$782.43 million).

Originally, the calls for bids for the two runways set a date of June 1 for proposals, June 28 to choose the winner and July 12 for work to begin, but there have been delays.

Mexico has also already launched a call for bids for the US$3.5 billion construction of the terminal building. Reuters reported last month that Spanish construction firm Ferrovial SA was mulling canceling its plan to bid jointly with cash-strapped local builder ICA for the project.