Slim’s Carso Will get Path to Maintain Contracts After Rail Collapse

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Mexican billionaire Carlos Slim’s Grupo Carso SAB must take responsibility for building a section of Mexico City’s metro that has collapsed, but is not losing any existing government contracts or future work, according to a person close to President Andres Manuel Lopez Obrador be excluded.

An independent investigation published on Wednesday showed that the disaster, in which 26 people died when an elevated railway line collapsed, was due to construction errors. Grupo Carso built the part of Line 12 that gave way, which reportedly suffered from lack of bolts, welding problems and problems with the concrete used.

The disaster will not jeopardize Carso’s chances of winning future deals as long as the company abides by all possible penalties, according to the government minded person who has asked not to be identified when discussing private information.

Arturo Elias Ayub, a family spokesman and Slim’s son-in-law, declined to respond to a request for comment.

Wagons were crooked after an elevated subway track collapsed in Mexico City.

Read more: Slim’s Grupo Carso is faced with looks as Mexico investigates the metro crash

The scandal took a blow to Carso’s reputation. It also triggered a drop in the approval ratings of Foreign Minister Marcelo Ebrard, who was mayor of the capital when the line was built, and the current mayor Claudia Sheinbaum Media reports that construction was in a hurry and maintenance was inadequate. Both politicians, members of Lopez Obrador’s Morena party, have been named as likely candidates for the 2024 presidential election.

Lopez Obrador, known as AMLO, is unlikely to hit Carso or Slim too hard because of their prominent roles in other government infrastructure projects and because maintaining a relationship with the billionaire will give the president market credibility, according to Duncan Wood, senior advisor to Mexico -Institute of the Wilson Center.

“AMLO doesn’t want to argue with Slim,” said Wood. “Your relationship is too important to risk. AMLO needs slim in terms of infrastructure spending. “

Carso shares fell 0.7% to 64.06 pesos at 2:38 p.m. in Mexico City. They are down about 2% since the New York Times first reported construction errors on the collapsed subway line on Sunday.

Though Carso relies heavily on public works, the company represents a sliver of Slim’s fortune and business empire. Its $ 7.1 billion market value pales in comparison to its main telecommunications company America Movil SAB, which is seven times the capitalization.

The relationship between Slim and AMLO has had its ups and downs over the past two decades. The president’s decision to abandon the construction of an airport that Carso was helping to build brought the two men into conflict. Then a dispute over a partially built motorway and another over natural gas pipelines tested their relationship.

But last year, a Carso unit received an order to build part of Lopez Obrador’s favorite project, the Mayan train. The two men shared breakfast in April to talk about the train, the president tweeted at the time with an accompanying photo of the two in guayabera shirts.

I had breakfast with Carlos Slim in Palenque because we are evaluating the progress of the construction of the Maya train and his company has a department for it. We also talked about other topics and I showed him the largest Ceiba tree I have in the fifth. pic.twitter.com/SCdXVO57Zx

– Andrés Manuel (@lopezobrador_) April 17, 2021

– With the support of Andrea Navarro

(Updates Carso Share Moves and adds context from the ninth paragraph)

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