Published On: Mon, Jun 29th, 2015

Construction of Underwater Tunnel in Veracruz, Approved by Congress

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VERACRUZ, MEXICO — According to the Website, the Coatzacoalcos underwater tunnel was approved by the state Congress with more than a 2-to-1 majority vote.

The tunnel initiative was put into motion by Governor Javier Duarte de Ochoa, aiming for construction to be complete in 12 months maximum.

Several objectives were achieved. For one, the work requires more than 500 million pesos ($32.1 million) which was secured through this congressional approval.

The Spanish construction firm Fomento de Construcciones y Contratas (FCC) will be financing the work.

Mexican investor Carlos Slim is the largest shareholder of this firm.

Veracruz Congress granted FCC the concession for the construction of an underwater tunnel in Coatzacoalcos. (PHOTO: THE NEWS MX)

Veracruz Congress granted FCC the concession for the construction of an underwater tunnel in Coatzacoalcos. (PHOTO: THE NEWS MX)

The new capital injection doubled the amount already invested which dramatically reduced the risk, which decreased the return the government must pay back to investors.

Investors expect a profit from their investments. Originally, the return rate was 26 percent. However, given the new conditions, the government administration imposed a 12 percent rate of return.

With the success of the project, Veracruz benefits and has a partner in half of the project without putting an additional burden when the rate of return of the work has exceeded.

Initially, the claim of the concession amounted to 1.1 billion pesos, which were never accepted by the state administration.

According to the the Federal Auditing Agency (ASF), it’s high-quality work. They have been documenting observations and conducting reviews at various stages. As of today, according to their website, www.asf., everything is in accordance to ASF monitoring.

Also, the Supreme Audit Office of Veracruz (Orfis) continues to review the procedures. At the appropriate time, they will determine if the amounts are likely and review any irregularities. One issue that concerns some legislators is related to legal proceedings. However, the sufficiency of such will be parallel to the resumption of work and always with respect to the separation of powers.

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