MEXICO CITY (Reuters) – Mexican billionaire Carlos Slim said on Wednesday that the private sector would step in to help finance ambitious infrastructure projects in Mexico so as long as public finances are healthy and inflation is under control.
FILE PHOTO: Mexican billionaire Carlos Slim attends a news conference in Mexico City, Mexico October 16, 2019. REUTERS/Luis Cortes
Slim described the prevailing conditions in Latin America’s second-largest economy as an opportunity to attract institutional investors, such as pension funds that often finance large-scale projects.
“This is a great opportunity for these funds to invest in these very infrastructure projects,” Slim said at an event held in Mexico City, adding that Mexican banks also had resources to finance projects.
He spoke a day after the government announced the first phase of an ambitious infrastructure plan underwritten by the private sector that covers a wide range of transportation and other public works projects over five years.
Slim said he, too, planned to invest, and would put 200 billion pesos ($10.32 billion) over five years into improving telecommunications in areas with little or no coverage, dovetailing with the government’s plan to get internet access to the entire population.
Slim’s family controls America Movil (AMXL.MX), the largest Mexican telecommunications provider whose operations includes mobile and fixed-line voice services, wireless and fixed-data services, internet access and pay television. Just last month Slim said that he expected to invest up to $5 billion in Mexican infrastructure during the current administration.
Slim said financial investors can get better yields in Mexico, where central bank interest rates of 7.5% are well above the United States and Europe.
The rate differentials have helped support the peso, although the economy has stagnated under President Andres Manuel Lopez Obrador, who took office a year ago.
Slim said it was important to protect the country’s credit rating, which has been under pressure from state oil company Petroleos Mexicanos’ heavy debt load.
The tycoon hailed the infrastructure package, but his experiences with the new government have been mixed.
Shortly before taking office a year ago, Lopez Obrador canceled a partly built $13 billion airport for Mexico City in which Slim was a major investor. The government compensated the investors, but business groups were furious at the decision.
Slim also questioned the efficiency of one of Lopez Obrador’s signature public works plans, a train route to connect the Pacific Ocean and the Gulf of Mexico at the Isthmus of Tehuantepec, the shortest point between the two bodies of water.
“Thinking that a huge boat from China unloads and transports while there’s another huge boat waiting to transport east to the United States, I believe, is a bad idea,” he said.
Reporting by Dave Graham; Additional reporting by Adriana Barrera; Writing by Stefanie Eschenbacher; Editing by Leslie Adler and Christian Schmollinger