‘A certain irony’: Mexican construction firms likely to be biggest winners of Trump’s wall
Building experts estimate barrier could cost $31bn, with most of 40,000-strong workforce from Mexican side of borderUpdated: Jan 26, 2017 12:03 IST
The biggest winners from the construction of Donald Trump’s “big, beautiful, powerful” wall along the US-Mexico border are likely to be Mexican cement companies and construction workers.
The US president signed executive orders on Wednesday laying the groundwork for the construction of his signature policy multibillion-dollar wall, which he has promised will keep out “Mexican rapists and drug dealers” and will be paid for by Mexico.
Big day planned on NATIONAL SECURITY tomorrow. Among many other things, we will build the wall!— Donald J. Trump (@realDonaldTrump) January 25, 2017
Trump has repeatedly said building the wall will cost $8bn to $10bn (£6.3 to £7.9bn), but construction experts have said it is likely to cost several multiples of the president’s estimate – perhaps more than $30bn.
The construction consultants Gleeds Worldwide said building a 1,000-mile wall – the border is 1,889 miles long but large parts are protected by natural barriers including mountains and the Rio Grande – would cost $31bn and take 40,000 people more than five years to construct.
Richard Steer, the Gleeds chairman, said the wall would be one of the most difficult and expensive construction projects ever undertaken due to the difficulty of bringing so many heavy materials to remote regions.
He said in addition to the $4bn of concrete and $6bn of steel required for the project, more than $2bn would need to be spent on clearing land and building access roads.
“The idea of building a 1,000-mile wall which is designed to be impenetrable is something that may well come back to haunt the president,” Steer said.
He described the project as “a highly effective and eye-catching election tweet but a pretty unrealistic tendering opportunity as currently reported.
“You’ve got to build roads to move the materials and machinery and get the workforce to the location as the wall is being built,” he said. “You would need a very big labour force to build it – some 40,000 people working over five years.”
Steer said the workforce would probably be drawn mostly from the Mexican side of the border as semi-skilled construction wages are much lower and there are more Mexican settlements close to the border.
“There would be a certain irony of getting Mexicans to build it,” Steer said. “It would likely be a mixed labour force, but Mexicans would be much less expensive.”
The high cost of transporting the approximately 44m cubic yards of concrete and 9m tonnes of steel to the site is likely to lead builders to rely on mostly Mexican-owned cement and concrete plants.
Analysts at Bernstein investment bank plotted the location of nearby plants and quarries and found that the Mexican building company Cemex was best-positioned to provide materials on both sides of the border.
“As ludicrous as the Trump wall project sounds (to us at least), it represents a huge opportunity for those companies involved in its construction,” a Bernstein analyst said in a research report for investors. “Cemex appears best positioned regardless, with cement, RMX [ready mix concrete], and aggregates facilities throughout the border region.”
Shares in Cemex have risen by 130% over the past year and hit an eight-and-half year high on Wednesday as investors waited to hear the details of Trump’s wall-building plan.
Cemex is the world’s second-largest cement and building materials producer, and also owns 23% of Grupo Cementos de Chihuahua (GCC), another cement company with several facilities near the site of the proposed wall. However, it is in the process of selling this stake.
On the other side of the border, the US builders Vulcan Materials and Martin Marietta Materials, which both have plants nearby, saw their shares rise by at least 10% on the day after Trump’s election and have continued increasing in value since.
Trump is expected to sign an executive order to direct federal funding to pay for the construction of the wall despite repeatedly declaring that Mexico would have to pay for it.
The president has insisted he is not breaking his election pledge and Mexico would reimburse the US for the cost.
“The dishonest media does not report that any money spent on building the great wall (for sake of speed), will be paid back by Mexico later!” he tweeted last Friday.
Last year Vicente Fox, the former Mexican president, said in a live interview on Fox Business Network TV: “I’m not going to pay for that fucking wall.” Trump responded saying: “The wall just got 10 ft taller.”
Trump is due to meet the current Mexican president, Enrique Peña Nieto, next week.
The government accountability office has previously said the cost of constructing a border fence is between $2.8m and $3.9m a mile on flat land, but up to $16m a mile on desert or mountain terrain. The existing roughly 700-mile fence cost the government $7bn.
The Corps of Engineers has estimated a border wall would cost between $16.4 to $70m per mile.
First Published: Jan 26, 2017 08:44 IST