Home Money & Business Business Mexican truckers halt key highways in response to unpaid government invoices

Mexican truckers halt key highways in response to unpaid government invoices

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Truck drivers in central Mexico staged protests on Tuesday by blocking key highways to voice their frustrations regarding unpaid wages for their contributions to a tourist train project. The demonstrations disrupted two significant routes headed north from Mexico City for several hours, alongside other highways on the Yucatan Peninsula, where the truckers had been transporting gravel and materials for the government’s Maya Train initiative.

During the protests, President Claudia Sheinbaum acknowledged the issue, revealing that the delay in payments was a result of the government owing money to the subcontractor companies that had hired the drivers. She stated, “The payments to the companies have started, so that they, in turn, can pay the truck drivers.” This incident reflects a broader trend of discontent among workers and business owners, who claim that the financially strained government has continually fallen short in settling its debts.

The federal government of Mexico is currently grappling with substantial budget deficits, which are attributed to several ambitious projects and entitlement schemes initiated during the previous administration. Last month, suppliers and contractors for the state-owned oil company issued an open letter detailing an outstanding debt of $5 billion for services rendered, highlighting the financial strain being imposed. “This situation… has caused adverse effects on our finances and on the regions where we work,” stated the Mexican Association of Petroleum Services Companies in their correspondence.

Under the leadership of former President Andrés Manuel López Obrador, known for his mentorship of Sheinbaum, the government began expanding funding to the state-run Pemex oil company, initiating significant construction projects and welfare programs. However, such initiatives have led to projected federal deficits of approximately 6% of Mexico’s GDP for 2024. The treasury department has announced plans to lower the deficit to 3.9% of GDP by 2025, though it remains uncertain whether this target can be met. López Obrador left behind numerous incomplete rail and refinery projects, while Sheinbaum has continued to expand benefits for senior citizens.

Moody’s ratings agency recently downgraded the country’s debt outlook from “stable” to “negative” and reaffirmed Mexico’s Baa2 credit rating, indicating that the growing governmental debts pose an escalating risk to the nation. The ongoing financial crisis has pushed Sheinbaum to explore unconventional taxes and funding sources. Just earlier this week, she indicated that revenue from dissolving certain independent agencies would primarily serve to bolster military funding, including increases in soldier salaries.

Additionally, Mexico’s Congress approved an immigration fee of $42 for each cruise ship passenger, with a significant portion of the proceeds earmarked for the armed forces. Under both López Obrador and Sheinbaum, the military has gained oversight over various sectors, including airports, airlines, and railways, with many projects overseen by the military incurring substantial financial losses. This context provides insight into the government’s pursuit of additional funding for military expenditures.

The Maya Train, a prominent tourist rail line constructed mainly by the military, has thus far struggled to meet passenger expectations. Having commenced operations on December 16, 2023, the train — while not yet fully operational with two less-traveled segments scheduled for launch later this month — has already been running the most frequented parts of the route. By December 8, authorities revealed that the train had accommodated just over 600,000 passengers in its first 51 weeks, a staggering one-fifth of the 3 million annual riders originally projected.

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