Hillebrand Steve, U.S. Fish and Wildlife Service

According to the US Border Patrol, construction began last Thursday to remodel 22km of wall separating San Diego and Tijuana. This first part of the wall will cost approximately US$147 million. The 2.5-3m wall that had divided the countries since the 1990s will now be replaced with a 5-9m wall with rock or metal posts that will secure it in place.

But isn’t there already a wall there?

Back in 2006, the US Secure Fence Act funded the country’s largest and most expensive infrastructure project of the 21st Century. This Act constructed and improved over 700 miles of border wall, costing an average of US$3.4 million per mile. In some areas, the US-Mexico border is made of barbed wire and steel barriers, while in others it is only marked by a sign or small fence. The most heavily-guarded zones are in the urban areas of San Diego and Tijuana where sometimes there are double, thick steel walls with barbed wire and security cameras. Over the years, the wall has required an immense amount of repair and maintenance, providing jobs to thousands and picking away at the country’s infrastructure budget. The wall was built as a way to reduce illegal immigration and the entrance of drugs, and even though Mexico and the US are not in conflict, thousands have died trying to reach the American Dream.

Funding the New Wall

The wall has a price tag of US$22 billion and where that money will come from has been one of the biggest controversies. In 2017, eight different prototypes for the wall were developed with costs between US$300,000-500,000. Trump’s original plan to have Mexico pay for the wall has not gone down well with Congress or with the Mexican President or public.

 

The list of ideas for funding the wall has continued to grow: taxpayers’ pockets, Mexican drug cartels, NAFTA and crowdfunding. Crowdfunding has picked up in the Mexican infrastructure industry but more so in real estate development. But could this work well for the construction of the wall?

In Arup’s global research report on crowdfunding urban infrastructure, the three main findings are:

  • Crowdfunding can also be used for medium- to large-scale projects. However, these projects do not have the ‘community-based’ appeal of smaller projects and so investor returns need to be more commercial.
  • Given that the infrastructure crowdfunding market may not achieve significant scale in the short to medium terms, any crowdfunded capital would need to supplement existing channels of finance (such as subordinate debt, which may be able to balance investor return expectations with the smaller scale of crowdfunding contributions).
  • Crowdfunding can increase community engagement and transparency in infrastructure delivery. However, political and/or developer support is key, particularly if the structuring complexity would outweigh benefits, or if there was adequate financing available from traditional sources.

 

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