Mexico Land Bridge Gains Traction as Panama Canal Faces Drought Challenges

Photo of author

By LatAm Reports Editor

Renewed attention has been directed towards Mexico’s Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT), a project with historical roots, amidst the logistical challenges the Panama Canal is facing due to drought. The CIIT is designed to facilitate the movement of goods between the Pacific and the Atlantic by integrating railway, port, airport, and road infrastructure in southeastern Mexico.

The concept of utilizing the Isthmus of Tehuantepec as a transportation route dates back to the nineteenth century when Mexico proposed it to the United States as a transit route. At the dawn of the twentieth century, the isthmus saw substantial activity with up to 60 trains per day, especially with the operation of the ports of Salina Cruz and Coatzacoalcos. However, the inauguration of the Panama Canal in 1914 diminished the use of the Tehuantepec route for cargo transit.

In the contemporary era, the CIIT has been established as a public and legal entity, formed under a decree by President Andrés Manuel López Obrador in 2019. It aims to offer a rapid and efficient alternative for transporting goods, rivalling the Panama Canal. President López Obrador officially launched the freight rail line as part of this initiative in September.

The CIIT project, which anticipates investments totaling $200 billion and the creation of 550,000 jobs by 2050, is viewed as a competitive counterpart to the Panama Canal and a potential concern for Panama’s waterway. Ricaute Vasquez, the Canal’s administrator, has acknowledged the Mexican project as a possible threat, given the current water-related challenges the Canal is facing.

Rafael Marín Mollinedo, the general director of the CIIT, has stated that the project’s completion is expected before the end of the López Obrador administration in September 2024, aligning with the Mexican government’s objectives for economic growth and development.