Annual infrastructure spending in Mexico could climb as much as 56 percent to $70 billion in the coming years as the country plows more money into roads, ports, water projects, and oil and gas, said Alonso Quintana, chief executive officer of Empresas ICA SAB.
Economic growth and financial stability could help Mexico boost infrastructure investment by as much as two percentage points of gross domestic product, from the current level of $45 billion to $50 billion a year, Quintana said today in an interview after participating in a Bloomberg CEO Roundtable in Mexico City.
“We’ve been in the range of about 4.5 to 5 percent of GDP these past years, it’s been quite good actually,” Quintana said. “I think we can go to $70 billion a year of investment in infrastructure.”
Expectations of heightened spending on construction have fueled a 43 percent gain in ICA’s stock price this year through Sept. 14, the sixth-largest gain in the IPC index of 35 Mexican stocks. ICA, the nation’s largest construction company, has benefited from speculation that President-elect Enrique Pena Nieto, who takes office Dec. 1, will boost investment in infrastructure projects.
ICA rose 0.1 percent to 24.30 pesos at the close in Mexico City.
The company, based in Mexico City, is still exploring strategic alternatives for its homebuilding unit including the sale of a majority stake, Quintana, 39, also said.
“There could be something in the near future in terms of a possible transaction,” he said. “Our priority is return to shareholders and profitability. It doesn’t really matter who controls the asset.”
ICA is still on track to complete the La Yesca dam project in western Mexico for the Federal Electricity Commission, the state-owned utility, Quintana said.
“We are on schedule and we’ve got almost the full reservoir,” he said. The company expects to start tests on the turbines in less than two months, Quintana said.