Informative newsletter regarding Mexico City's new airport

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Dear clients and friends:

Please find hereunder our informative newsletter regarding the recent changes to Mexico City’s new airport project, prepared by our team of professionals at Zozayacorrea Sahagún Arizaga - Abogados y Fiscalistas.

During the last days of October of the present year, a "national consultation" was held, in which the Mexican citizens had the opportunity to choose the future of the new airport in Mexico City (“NAICM”).

This consultation had a participation of a little over 1% of the registered voters in the country, that is to say, less than one million citizens went out to participate in the consultation, to which the majority voted for the option to cancel the ongoing project in the Texcoco area, to instead develop two runway areas at the Santa Lucia military base, nearby to Mexico City, as well as reconditioning the current airport in Mexico City and the city of Toluca, so that the three terminals operate jointly.

In this context, it is important to point out that Article 12 of the Federal Law of Popular Consultation, and moreover, Article 35 of the Mexican Constitution sets forth specific requirements to carry out consultations, such as having a participation of at least 40% of the registered voters in the country. However, as already mentioned, participation in the consultation reached only 1% of participation.

Likewise, the Constitution and the secondary law on the matter, are clear as to who may request the realization of a consultation of this nature, without this having been observed, since as is known, the consultation was convened by the president-elect, who is not legitimized for these purposes, and in general, does not hold any legal faculty until he officially assumes his functions.

It also stands out the fact that the consultation was not organized and sanctioned by the National Electoral Institute, which is the competent authority, so in view of all these irregularities, the result of the consultation exercise cannot be considered legitimate or binding.

Since the beginning of the construction of the NAICM in 2015 and until September of this year, the Mexico City Airport Group (“Grupo Aeroportuario de la Ciudad de México”), who is the concessionaire of the new airport, has signed more than 450 contracts with a value of more than $150,000 million Mexican pesos, of which 70% have already been concluded, remaining valid more than 330 contracts worth $140,000 million pesos, that is to say, the current contracts concentrate the bulk of investments.

The cancellation of the NAICM could have various legal consequences, such as the breach of the aforementioned contracts, which will oblige the Mexican Government to pay the investments already made, also to compensate the damages and losses caused to the companies for the cancellation of theNAICM, as well as the trials in courts by companies and individuals that would be affected by this controversial decision. Some economists estimate that the cancellation of the NAICM will cost the incoming government more than $10 billion dollars, that amount will be for redeeming bonds, paying bank debt and to compensate the airport concessionaires.

In conclusion, such procedures could be complicated and may take years to complete, which could affect the start of the work at the military base in Santa Lucia.

From any point of view, the legal and economic situations that the next administration will face are complex, uponhe upcoming December 1st, once the new President takes office.


For more information, please contact the undersigned on the following email address in order to obtain more information:

Or one of the members of Zozayacorrea Abogados y Fiscalistas on the email address:

If at the northern states, please contact Ali Kuriali.kuri@zozayacorrea.com

Thanks and best regards,

José Miguel Zozayacorrea
Socio/Partner
Zozayacorrea Sahagún Arizaga - Abogados y Fiscalistas
T: +52 (33) 1493 7279
Switch: +52 (33) 1493 7280
A: Blvd. Puerta de Hierro 5153, Piso 2, Fracc.
Puerta de Hierro, 45116, Zapopan, Jalisco,
México

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