Tehuantepec Isthmus wants to compete with the Panama Canal

The expansion of the Panama Canal has inspired several countries in Central America such as Costa Rica and Honduras to build their own dry canals. To achieve this, new roads, railways and ports have been constructed over the last few years.

Now it is the turn of Mexico, which is investing $153 million to spur economic development in the Isthmus of Tehuantepec interoceanic corridor through a comprehensive project that will connect the Gulf of Mexico to the Pacific Ocean and rival the Panama Canal.

Expansion works of the Panamerican Highway in Panama.

Expansion works of the Panamerican Highway in Panama.

The announcement was made by the governor of Oaxaca, who explained that the project includes the construction of a direct highway route between the port cities of Salina Cruz in Oaxaca and Coatzacoalcos in Veracruz.

Alejandro Murat Hinojosa said the $36 million highway will reduce travel time between the two ports from the current four hours.

Also part of the investment package:

  • The bidding process will start soon to find an operator for the railway system between the two cities.
  • The Antonio Dovalí Jaime oil refinery in Salina Cruz will be modernized and readied for a new trans-isthmus pipeline. As well, $5 million has been allocated to modernize the port.
  • A $27 million agroindustrial park.
  • $13 million in renewable energy development through wind farms and solar power plants.
  • More than $26 million to boost 11 sectors, including the mezcal, lemon, pineapple, coffee and timber industries, and link them with private investors and local universities in an effort to improve regional, domestic and international trade.

Some aspects of the investment in the region have been announced before, such as the new airport and military base in the city of Ixtepec, located an hour away from Salina Cruz.

Murat also noted during the announcement that the mentality of Oaxaca’s business sector must change: “We have to believe in ourselves, in our virtues, and work together as a team if we’re to bring our state up from the bottom ranks, because we are competitive, we have the elements and the tools to be the best, we only need to believe in ourselves.”

The isthmus region has been designated one of several Special Economic Zones, intended to promote economic development in Mexico’s poorest regions. Until now it has been the focus of wind power development but little else.

The state’s Environment and Sustainable Development Secretary said last week that 90% of the money invested in Oaxaca has gone into wind farms in the isthmus. There are now 24 in operation, containing 1,765 turbines, making the state the country’s chief source of wind energy.

Not part of the new investment money but an important element for the region’s transportation is the new Mitla-Tehuantepec highway connecting it with the state’s Central Valleys. Murat said it would be completed within 12 months.

Both it and another major highway project that links Oaxaca city with the coast have been subject to long delays. Work on the latter is to begin soon, Murat said, as contracts worth $76.5 million have been awarded to local contractors.

A total of $153 million has been allocated for completion of the highway, which runs between Barranca Larga, outside Oaxaca, and Ventanilla, near Puerto Escondido.

Meanwhile Panama is also trying to catch up with the neighbors with ambitious plans to expand the Panamerican Highway, from Panama City to Paso Canoas, on the border with Costa Rica. However, the progress has been slow, due to rugged terrain, because the highway passes through a mountain range.

The second part of this expansion of the Panamerican Highway is already on the way with construction of two additional lanes in the Panama West province and a fourth bridge over the Canal. These road improvements will make Panama even more attractive for those shipping goods around the world, because Panama will have two canal one dry and the interoceanic waterway.

Leave a Reply

Your email address will not be published. Required fields are marked *