Shares of Carlos Slim’s industrial conglomerate Grupo Carso are down just 3% since a third-party report revealed on June 16 that the group may be responsible for a construction flaw that led to the death of 26 public transport passengers last month, when a metro train overpass collapsed in Mexico City.
An independent investigation conducted by DNV, a Norwegian external auditor, found at least “six deficiencies in the construction process” that led to the overpass’ collapse. These had to do with improper welding and screw installation, as well as the use of different kinds of concrete in the structure. The Mexican government asked the Norwegian firm to investigate in order to have an impartial party doing the scrutiny.
Shares of Grupo Carso, which trade on the Mexican Stock Exchange, hit $65.49MXN (US$3.30) on June 16, the day the DNV report was released—up from $58.55MXN (US$2.95) on the day of the crash and flat from the beginning of 2021. The stock stands at $63.50MXN (US$3.20 ) as of Monday’s market close—meaning shares are down just 3%.
Slim, who has a $70 billion fortune, per Forbes estimates, owns (with his family members) a 79% stake in Grupo Carso, a stake worth $5.8 billion as of the end of trading on Monday.
The damaged metro line was built by a consortium made up of three construction firms: Mexican builders ICA and Grupo Carso’s subsidiary, Grupo Carso Infraestructura y Construccion (CICSA), as well as French train builder Alstom. The latter clarified in a statement that it only participated in providing signaling, control systems, power supply and monitoring, and therefore was not responsible for the accident that occurred May 3.
ICA built 15 of the 20 stations in the metro line, while Grupo Carso built the other five. Carso’s section included the area that collapsed in the accident.
Grupo Carso’s 25% stake in the 2008 public infrastructure contract to build the metro line in question produced $193 million in project revenue for the construction subsidiary, according to Grupo Carso’s financial statements.
Grupo Carso’s market capitalization of US$8.9 billion has stood strong despite the crash, in large part due to reports that the government will not admonish the company by canceling its government contracts, which are one of CICSA’s largest sources of revenue.
Just two months ago, the Carso subsidiary, along with FCC Construccion, a Spanish construction company, was given the contract to build the second section of President Lopez Obrador’s Mayan Train, one the best known infrastructure projects of his presidency. The 932-mile-long railway will traverse the Yucatan peninsula in southern Mexico, connecting some of the country’s most popular tourist destinations including Cancun and Chichen Itza. Each of the two companies will earn $468 million for the completion of the project.
After a closed-door meeting between the president and Slim last week, President Lopez Obrador said Slim and his company, along with the other members of the consortium, will assume responsibility for fixing the metro line wreck. It remains unclear whether the company will be compensated for the rebuilding effort. The Mexican government’s official investigation of the accident has not yet been finalized.
Grupo Carso declined to comment.