Mexico City Airport Threatens to Turn Into Investor Standoff

10/23/2018 – Bloomberg

1000x-1By Daniela Guzman & Andrea Navarro

A referendum on the future of Mexico City’s partially built airport this week is shaping up to be president-elect Andres Manuel Lopez Obrador’s first standoff with investors who have taken a wait-and-see approach to the new government.

The nationwide vote from Oct. 25 to Oct. 28 will ask people whether they want to push ahead with the $13 billion Texcoco project, or go for a cheaper alternative further away from Mexico City. According to a national poll by El Financiero last month, 63 percent of respondents support the continuation of the airport construction.

As the referendum approaches though, investors are getting increasingly nervous. The yield on $6 billion of bonds sold to finance the new airport has soared to a record this month after AMLO, as the president-elect is known, said in a Facebook video that “we can’t finance this project” and one of his advisers warned it was two years behind schedule. It could become a litmus test of the new government’s approach to business and financial affairs.

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