On a recent trip down to Riviera Maya, we decided to drive down to Bacalar to check out the Bacalar Lagoon, and it's 7 hues. On our drive we noticed something was being constructed next to the main road, and we figured it was a toll road because usually in Mexico multi-lane toll roads are built next to free all-access bumpy 2-lane roads. But we were wrong. Once we asked around we learned that they aren't building a toll road; they are building a train. However, it isn't just any train connecting one city to another city, this is Tren Maya, a mega infrastructure project with a big vision connecting the entire Yucatan Peninsula and with a familial name paying homage to the region's mighty ancestors, the Maya.
Tren Maya or also known as Mayan Train or Train Maya is a 1,525-kilometre (948 mi) railway in Mexico that will connect major cities in the Yucatan Peninsula's 5 states. It will have 7 sections with 34 stations across Tabasco, Chiapas, Campeche, Yucatán and Quintana Roo. Construction began for all 7 sections simultaneously in June of 2020 and it is slated to open in December 2023. It is anticipated to have about 8,000 daily riders and ticket fares will vary for locals and tourists. For example, a trip fare from Cancun to Playa del Carmen will cost locals around 50 pesos (US $2.75) and it will cost tourists around 1,000 pesos (US $55.40).
When I got home I started to do some more research on Tren Maya to get a better idea of the project, it's economic impact and costs. On the one hand I found that UN-Habitat, estimates Tren Maya will create 945,000 jobs for Mexico and potentially help bring over 1.1 million people out of poverty. On the other hand, I also learned that the project approval politics got tricky and pretty sticky around it's climate, archeological and equity implications, nonetheless it got approved.
From Tren Maya's Wiki page the crowd-sourced authors shared that the tactics used by President Miguel Lopez Obrador to get the project approved created lots of chatter amongst rivals, which wasn't surprising, but what was a head turner was the criticism that came from the Mexican Office of the United Nations High Commissioner for Human Rights. The UN's criticism was mostly focused on the approach used by Lopez Obrador to get the project started and who it excluded. Specifically, the UN raised concerns that the voting materials only focused on the positive aspects of the project and were not translated properly. They also didn't like that the identified voting locations excluded those with no means to travel to them and essentially left indigenous women without a vote.
Project approvals in any country are never easy for projects of this size and can get quite lengthy. However, it is important to note that while the approval process for this project compared to approval processes in countries like the US didn't take that long, it did take several years to get approved. Also, Tren Maya wasn't conceived overnight, it was something Lopez Obrador had been thinking about for a long time.
Knowing the price tag for mega projects of this magnitude can get up in the billions, I was curious about the price tag for Tren Maya. In 2018, the agency building the project Fonatur (National Fund for Tourism Development) said it would cost $150 billion pesos (US$8.3 billion in October 2023 dollars) to build. In 2022 they updated their construction cost projections to 200 billion pesos (US $11.1 billion). However, early on there was skepticism around the cost projections the government put out and in 2019 a local think tank, the Mexican Institute for Competitiveness, considered the Mexico City-Toluca train project costs to come up with their own construction projections of 480 billion pesos (US$26.6 billion), which was 2.4 times the amount of the 2022 projected costs.
As I kept searching for the project costs I just couldn't see how this project was only going to cost $11.1 billion with the extent of the project scope of work, the accelerated timeline, the people power working around the clock to get this project built that we saw on our drive to Bacalar, and the increasing costs of construction materials. The optimist in me thought that perhaps Lopez Obrador is trying to prove a point that projects don't have to cost so much if Mexican politicians don't take their lions-portioned political grafts, but the core project costs just weren't adding up so I decided to keep digging some more. While I didn't dig deep into the project financials because they are confidential, I did use my Spanish skills to find that the Mexican government had tripled it's project cost projections last month, and now expects to spend 515 .8 billion pesos (US $28.6 billion). That's a much more believable figure, and even though its way more than they expected to spend, it is still a pretty good price when you compare it to the $128 billion that California's high-speed rail project is projected to cost to build 800 miles.
After getting a better idea of how much the project will cost I looked into the project financing details. It turns out the government turned to tourism tax revenue to help the deal pencil out. And while it's hard to confirm, I'm pretty certain tourism taxes will be paying for a good chunk of the project if not all it. It's a smart and logical move considering the popularity of Cancun, Playa del Carmen, and Tulum among tourists and the many tourism tax line items I saw on my hotel bill. The cash is specifically coming from the 3 government backed banking institutions that together financed the deal: National Bank of Public Works and Services (Banobras), the Nacional Financiera (Nafin) bank and the Foreign Commerce Bank (Bancomext). Interestingly, while the project is being built by Fonatur, it will be managed and operated by the military.
To see this project being built in it's entirety all at the same time on our drive to Bacalar was pretty mind blowing. California's high-speed rail is being built in small segments over many more years. Only 422 miles of the high-speed rail project's 500-mile Phase 1 from San Francisco to Los Angeles/Anaheim has received environmental clearance, with only 119 miles in active construction.
After learning about Tren Maya's journey I hope Lopez Obrador, his team and his successors are able to identify ways to mitigate the main environmental, archeological and equity concerns to help improve Tren Maya's legacy for the Yucatan Peninsula and Mexico as a whole.