\n
![](\"https:\/\/fortune.com\/img-assets\/wp-content\/uploads\/2024\/07\/GettyImages-1838655398.jpg?w=2048\")
<\/p>\n [ad_1]
\n<\/p>\n
The pet rail project of President Andr\u00e9s Manuel L\u00f3pez Obrador could wind up costing as much as $30 billion, is only half finished as he heads into the final 2 1\/2 months of his term, and has wreaked\u00a0major damage on the environment<\/a>.<\/p>\n But the most damning judgments<\/a> on the Maya Train tourist line, which runs in a loop around the Yucatan Peninsula, are the ridership figures on about half the railway that is now open: only about 1,200 people per day use the train, according to government figures released Monday.<\/p>\n Most ride it only on short stretches<\/a>\u00a0between the city of Merida and Cancun, or the nearby city of Campeche. The big hope for paying the train\u2019s massive cost was that tourists would use it to depart from the resort of Cancun and explore the whole 950-mile (1,500-kilometer) route to visit the Mayan archaeological sites that dot the peninsula.<\/p>\n But a round-trip route from Cancun to the well-known Mayan temple complex of Palenque has drawn only about 100 passengers per day each way in the first six months of operation. That is a volume that a bus or two per day could handle far more cheaply.<\/p>\n The government had originally promised the train would carry between 22,000 and 37,000 people per day. Current ridership is about 3-5% of that, with three of the four most popular stations \u2014 Cancun, Merida, Palenque and Campeche \u2014 already in service.<\/p>\n Admittedly,\u00a0the rail line<\/a>\u00a0down the heavily traveled corridor linking Cancun and the resorts of Playa del Carmen and Tulum \u2014 an area known as the Riviera Maya \u2014 isn\u2019t finished yet, and only 17 trains are operating; three times as many may eventually be added.<\/p>\n But critics say there is little evidence the Cancun-Tulum line will make the project profitable, because it\u00a0doesn\u2019t run particularly near<\/a>\u00a0any of the resort towns it is supposed to serve.<\/p>\n The Cancun-Tulum railway was originally supposed to run on an elevated line over the coastal highway, where most hotels are. But facing technical difficulties, the government changed the route by cutting a 68-mile (110-kilometer) swath through the jungle and moving the tracks about 4\u00bd miles (7 kilometers) inland.<\/p>\n So instead of hopping one of the micro-buses that run constantly down the coastal highway, tourists or resort workers would have to take a taxi to the train station, wait for one of the few daily trains, and then take another taxi to the resorts once they reach their destination.<\/p>\n \u201cThe uselessness of this project was foreseeable,\u201d said Jose \u201cPepe\u201d Urbina, a local diver who opposes the train because its steel pilings have damaged the caverns he has explored for decades. \u201cIn reality, the train doesn\u2019t go anywhere you couldn\u2019t get to by highway before.\u201d<\/p>\n \u201cThese are rail lines that don\u2019t provide any useful service for workers, for students, for any daily use,\u201d Urbina said.<\/p>\n One thing the railway project did create was jobs: Manuel Merino, the governor of the Gulf coast state of Tabasco, said the Maya Train had created 20,000 direct or indirect jobs in his state and lowered the unemployment rate by 40%.<\/p>\n \u201cThis makes it truly a motor for developing the south,\u201d a historically poorer and undeveloped part of Mexico, Merino said. But most of those jobs will be gone once construction is finished, and federal officials are also casting around for ways to try to make the railway pay for itself.<\/p>\n Officials have suggested freight trains may run on the tracks as well, but there is little industry in the region, and thus freight demand is limited.<\/p>\n It\u2019s not clear whether the government ever thought the railway would be profitable. L\u00f3pez Obrador had already decided to build it before feasibility studies were carried out. According to a 2019 government study, the railway was going to cost $8.5 billion, and the estimated benefits would be about $10.5 billion.<\/p>\n But those \u201cestimated benefits\u201d always included a lot of intangibles, like reduced traffic on highways, quicker travel or increased tourism revenues, all of which either didn\u2019t happen or were unrelated to the train.<\/p>\n Moody\u2019s Analytics Director Alfredo Couti\u00f1o noted that cost overruns are common on such projects.<\/p>\n \u201cAs was expected, the Maya Train project was not finished as planned and the cost was much higher than the original budget,\u201d Couti\u00f1o wrote.<\/p>\n \u201cThe question that still must be resolved is if this project will be profitable in the medium term when it is expected to be fully functional, operating at full capacity and managed as a government concern and not as a private enterprise.\u201d<\/p>\n<\/div>\n\nRecommended Newsletter: <\/strong>CEO Daily provides key context for the news leaders need to know from across the world of business. Every weekday morning, more than 125,000 readers trust CEO Daily for insights about\u2013and from inside\u2013the C-suite. Subscribe Now<\/a>.<\/div>\n