ICA Keeps Powder Dry for New Projects

Mexican construction giant ICA is working on Mexico City’s metro expansion project – funded by the government – but it is keeping powder dry for deals coming up later in 2008. “We are expecting some other concessions towards the end of the year where capital may be required, and we are preparing for those,” Alonso Quintana, CFO at ICA, tells LatinFinance. He adds that these include the Farac tollroad sequels and some water projects like a $500m water treatment plant in Guadalara, which should be started this year. Water treatment is typically not hugely lucrative, but Quintana says overall returns make it worthwhile, including revenue from construction and structuring. “We try to make it that overall our return is double digit, hopefully getting to 15% area,” says the official. ICA has risen to prominence in Mexico, beating to the punch Carlos Slim’s IDEAL on several high profile transactions. “Our objective is not to beat IDEAL. Our target is to win the big projects we feel most competitive in and where we have most advantage, where we can create more value,” says Quintana. He adds that ICA is partnering with IDEAL in some projects. ICA is currently focused on roads, airports and some water projects. This includes a high-speed road link between the capital and Veracruz port.