Highway to Oaxaca 2016?
¡Viva Puerto! has been reporting since 2010 on the construction of a 104 km toll road that will connect Puerto Escondido to Oaxaca via Ejutla. Once completed, the drive time from the Coast to the Capital will be only 2 ½ hours.
- The goal: June 2016, with a work force of 3,000
- The obstacles: community conflict; lack of funds
In the highest mountains through which the highway will pass, there is a six-kilometer stretch that goes through pristine, pine forests. The region is uninhabited and traditionally has been the border between the communities of San Sebastián Coatlán and San Francisco Coatlán. Now both communities claim the land and want to be indemnified for it.
It is up to the State to reach an agreement with these communities, but the process has been very slow. It has gone on for at least three years. So there has been no construction in this region at all. Coming from Puerto, the highway – at least in the form of service roads – extends to a little past where the San Antonio Lalana tunnel will be built. From there you take an hour and a half detour on dirt roads through the mountains, passing through the town of San Sebastián, and returning near the town of San Pablo Coatlán.
ICA, Mexico’s largest construction company, is building two highways in Oaxaca, one to the Coast and the other to the Isthmus. But by its own admission it has fallen behind on these and other projects this year because of its financial problems.
Gabriel de la Concha, ICA’s finance director blamed the government for the company’s problems, saying that payments were delayed, as well as the depreciation of the peso, which makes imported materials, like steel, more expensive.
Meanwhile, the Central Bank reported that it had changed its projections for economic growth for 2015. It had forecast an increase in the GDP of 2 to 3 percent. The revised figure is 1.7 to 2.5 percent. This is mainly due to the fall in the price of oil. Thus there will be cuts in infrastructure projects in 2016.
ICA was doing well last year; its shares reached a height of 27 pesos on the Mexican Stock Exchange, but they were down to 8 pesos in August. The loss of over 50% of its value since the start of the year was a result of a fall in ICA’s earnings and operating flow. The company plans to increase its capital by selling 5 billion-pesos of shares by the end of this year and the same amount in 2016.
In August, Moody’s Investors Service deemed ICA a high credit risk with a B2 rating.
RAINY SEASON, HIGHWAY TO OAXACA
On September 28, 2015, we rented a jeep from 3 Reyes and made the trip from Colotepec to Ejutla in 5 ½ hours. ICA engineers say they do it in 3 hours, but we drove slowly. There were two detours because of rock slides, plus a 90-minute detour around the 6 km in the mountains where there is no roadway.
Most of the workforce (engineers, machine operators, local truck drivers and service employees) was laid off in August. We were told construction would resume in mid-October.
The communities of San Francisco Coatlán and San Sebastián Coatlán both claim the 6 km zone through which the highway will pass. Until the situation is resolved, there can be no construction at the midpoint of the project.