PPPs have long been proven an efficient and sustainable way of financing public services and projects. Governments the world over have resorted to embarking on these partnerships with private institutions as a viable alternative to financing costly infrastructure, and to deal with the ongoing costs of running large projects.
According to the International Project Finance Association (IPFA), “in many countries the financing requirements of current and prospective infrastructure needs far outstrip available resources.” For the Mexican government, PPPs have long since been a key tool to finance cultural infrastructure in particular, with a huge degree of success.
According to the World Bank, the financial crisis that afflicted global markets between 2008 and 2011 served to fuel interest in PPPs. “Facing constraints on public resources and fiscal space, while recognising the importance of investment in infrastructure to help their economies grow, governments are increasingly turning to the private sectors as an alternative additional source of funding to meet the funding gap,” reads the World Bank’s Infrastructure Resource Centre.
Mexico has certainly not been the exception, and though the country continues to see strong growth, other setbacks have imposed restrictions of the public purse. Focusing on basic needs of the people and the economy has always been the nation’s policy. Schemes such as PPPs allow its to keep this focus, while financing key infrastructure projects. The Gran Museo del Mundo Maya, is one such success story.
The museum, located in Mérida, Yucatán, celebrates Mayan culture. The Yucatán peninsula of southern Mexico was a Mayan stronghold and as such the ancient culture is a fundamental influence in the region today. In fact, Yucatán is one of the tourism epicentres of Central America, as visitors flock to the peninsula to visit Mayan architectural relics, left over from over a thousand years ago. In many ways, Mayan civilisation lives on in the modern inhabitants of Yucatán.
The Gran Museo del Mundo Maya
Pieces on display
Grupo Hermes expenditure
The Gran Museo del Mundo Maya was conceived as a platform where visitors can experience and witness Mayan culture and its legacy. It is also a ground-breaking project for the Yucatán province, who have been financing its tourism infrastructure projects exclusively by PPPs since 2011. The museum project was the first of its kind in the region and will serve as a template for future enterprises.
These schemes are a form of joint work that require even greater acceptance in financial culture of the country and in the next few years, it will be refined and will enjoy greater popularity. As for the construction of infrastructure in Mexico, the history of multiple or combined participation in project financing is very recent, and is the reason why this will need to work to achieve greater momentum.
When the government lacks resources to carry out works that require substantial investment, these kind of schemes come in use. The Gran Museo del Mundo Maya was developed in partnership with the Inter-American Investment Corporation (IIC), who provided a loan of $7.4m to develop and outfit the museum and its exhibits, and well as the upkeep of the facility.
Opening its doors in September 2013, it is the home to over 800 pieces, from textiles to religious artefacts. It also contains a large cinematic projection room. It is the museum’s architecture and design that truly make it a memorable enterprise.
Developed by Grupo Hermes, it boasts an intricate tower structure covered in a colourful steel frame resembling local knitting patterns. It is a bold project that required 12 months of solid construction work to go up. Grupo Hermes has been the local government’s main partner in this PPP, and the company has already collected a number of Mexican and international accolades. The work marks a milestone as it is the first museum built with this kind of advantageous scheme.
Similar partnerships could be on the cards in the future. Public policies actually achieving a greater impact for the benefit of the population will require joint investments with the aim of providing not only more but mainly high quality service, and this will need to go to PPP systems, and support a situation of restricted economy.
According to the IPFA, when projects are developed as PPPs “there is evidence of better quality in design and construction than under traditional procurement.” This is because when a PPP is negotiated it “focuses on the whole life cost of the project, not simply on its initial construction cost. It identifies the long-term cost and assesses the sustainability of the project.”
Grupo Hermes has also been the ideal partnership for this enterprise… Without such a partnership it is unlikely that the local Yucatán government would have been able to develop
a museum to this high
standard and quality
For the Yucatán government, the partnership could not have been better. The museum is already a hit, and laid the foundations for similar enterprises. The best plan to build more PPP schemes in Yucatán will definitely be to follow the example of the optimal performance of the work with which the state currently has the Great Museum of the Mayan World, thus being the first of its kind in the state as the importance of the work done.
Grupo Hermes has also been the ideal partnership for this enterprise. Since it won the concession in 2011 – after an international bidding process – the company has committed over $58.3m, and will continue to manage the museum for the next 20 years. Without such a partnership it is unlikely that the local Yucatán government would have been able to develop a museum to this high standard and quality.
While many other countries have looked to the PPP model in order to develop crucial infrastructure projects such as this, the care Grupo Hermes has dedicated to the development of the museum is unique to this project.
The building was developed with 4A Arquitectos – a Merida-based architectural firm – as it was important for Grupo Hermes to invest in local talent and labour. To that effect the group has estimated that the museum will generate close to 1,500 direct jobs and 3,100 indirect ones. Out of the construction workers alone, one in three had Mayan origins.
The museum is already a landmark for Yucatán and Mexico, which will attract international and national tourists eager to know more about the Mayan culture and heritage. Without a doubt, it is both a cultural milestone and an economic asset for the development of the state.
It has attracted visitors from around Mexico and beyond, and has been lauded as the “greatest cultural asset of the century” by the Yucatán Compass.