October 31, 2018 / 11:33 PM / in 2 years

Mexico's president-elect meets airport construction firms

MEXICO CITY, Oct 31 (Reuters) - Mexican president-elect Andres Manuel Lopez Obrador met on Wednesday with Hermes and ICA, two of the biggest construction firms contracted to build a $13 billion airport near the capital that is now slated to be scrapped, company executives said.

Lopez Obrador, set to take office on Dec. 1, on Monday said he would heed the results of public consultation that called for abandoning the current project and instead converting a nearby military air base for commercial use.

The decision pummeled the peso and Mexican stocks and generated uncertainty over the fate of multi-million dollar contracts.

But Hermes and ICA said their meeting was positive, although they did not say whether they would work on the alternative project, building two runways at the military air base in the town of Santa Lucia in Mexico state.

"It went very well," Alberto Perez Jacome, director of Hermes Infrastructure, said after the meeting. "We are very happy that there are already mechanisms in place, working groups, and we are certain they will act in accordance with the law."

For its part, ICA said that despite the decision to cancel the project, the company is open to bidding for new contracts during Lopez Obrador's six-year term in office.

"We are going to work on all the infrastructure projects that are of interest to the new government," ICA Chief Executive Guadalupe Phillips said.

Lopez Obrador's administration has suggested that contractors for the original project could work on the Santa Lucia plan, but legal experts say contracts cannot simply be transferred from one project to another.

"The contracts are tailor-made," said Juan Francisco Torres Landa, managing partner of the law firm Hogan Lovells in Mexico City. "The other project would have to go through a new procurement process."

Lopez Obrador argued during the campaign that the new airport was tainted by corruption and would be expensive to maintain due to the complexity of the terrain.

Construction on the project began three years ago and is roughly a third complete.

U.S. engineering firm Parsons, which is managing the project, said it would adapt to the new conditions.

"Parsons' job is to implement our customer's vision of the project in the best way possible. If that vision involves change, we will respond with agility and will use our expertise to bring our customer's plans for the program into fruition," Parsons Senior Vice President Perfecto Solis said in a statement. (Reporting by Mexico City Newsroom; Writing by Anthony Esposito and Daina Beth Solomon; Editing by Phil Berlowitz)

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