Mexico’s Obrador Threatens Probes If Airport Not Halted in July

(Bloomberg) -- Mexico’s left-wing front-runner wants a $13 billion airport project halted immediately should he win election in July, threatening officials with legal action if they wait until he assumes power in December, according to his pick for transportation minister.

Andres Manuel Lopez Obrador will ask President Enrique Pena Nieto to suspend the project in July to allow for the incoming administration to carry out audits on the airport’s construction and finances, said Javier Jimenez Espriu. Moreover, contractors can’t expect cancellation fees if the project is scuttled.

Mexico’s Obrador Threatens Probes If Airport Not Halted in July

"If we aren’t allowed to do this during the transition because they say they’re still in government and don’t allow it, we won’t start a war. Do what you please, but assume responsibility," Jimenez Espriu said in an interview in Mexico City. "On the first of December, we’ll open a complaint into those who may be found responsible."

The complaints would be brought before federal agencies like the nation’s comptroller and the Federal Superior Auditors, he said. That would be in addition to any cases the government may bring against acts of corruption linked to the airport, if proof of wrongdoing is found.

Jimenez said the likelihood is "very high" that the project would be canceled and replaced by two new runways at the Santa Lucia military base, about 50 kilometers from the current airport.

He denied government estimates that ending the project would cost 120 billion pesos ($6.6 billion), in part because companies wouldn’t have a legal right to cancellation fees due to the public nature of the project.

Compensations fees are "another lie" by the government, Jimenez said. Charging such fees "is unconstitutional. The government has the right to cancel a contract."

Instead, Lopez Obrador would renegotiate contracts with the builders and restructure debts with bond holders, Jimenez said, adding that the candidate had pledged to protect investors in the project.

The candidate has said the current project would cost billions in maintenance fees each year because it’s being built on a sinking lake bed, robbing a new government of public funds. The Pena Nieto government says it was the only viable site to build an airport large enough to relieve congestion.

Jimenez said that he was pretty sure that the Santa Lucia site was a viable alternative, but that if all experts agree it isn’t, he’d accept that.

©2018 Bloomberg L.P.