Mexico’s Maya Train Project to cost up to $20 billion, 70% over budget

Mexico President Andres Manuel Lopez Obrador’s flagship Maya Train project will cost up to $20 billion, his second mega infrastructure project to be running wildly over budget amid setbacks and soaring inflation.

Lopez Obrador announced the $15 billion to $20 billion price tag at a press conference Tuesday, which is as much as 70% higher than the $11.8 billion estimate the government had previously announced.

The rail line’s projected cost ballooned in part because of surging costs for shipping and raw materials. The original route has also undergone several changes and court suspensions amid concerns over the environmental impact from the project, while Lopez Obrador has insisted it be inaugurated by the end of 2023, adding pressure for builders to finish at all costs.  

The president’s other key project, the Dos Bocas oil refinery, has also seen its cost spiral out of control to reach as much as $18 billion, more than double its original price tag.

The exorbitant cost for both of these projects clashes with the president’s otherwise frugal approach to fiscal policy. Many economists blame his tight spending controls during the Covid-19 slump for aggravating Mexico’s downturn in 2020.

On Monday, Lopez Obrador said Grupo Mexico SAB will no longer be in charge of building a 38-mile stretch of the track, apparently ending a contract with the company worth 15.4 billion pesos ($753 million).