New $577 Million U.S. Embassy in Mexico Being Criticized

Critics say new American embassies are getting more expensive.

Cost overruns in Afghanistan are over $150 million, and the new embassy in London could top $1 billion. Nearly a year ago, CBS News correspondent Nancy Cordes showed us how glass for the London embassy had to be shipped back and forth across the Atlantic for framing. Now, Cordes reports from Washington on problems with an embassy in the works in Mexico.

It is an embassy that was supposed to cost $577 million to build, but the construction estimate has gone up by one third — and the State Department hasn’t even broken ground yet.

No one disputes that the current U.S. Embassy in Mexico City is crowded, outdated and needs to be replaced. So four years ago the State Department bought a 15 acre plot in a former industrial district for $120 million. But there was a catch: the site had housed a Colgate-Palmolive factory for decades, which left behind hazardous waste. Colgate has been cleaning the site but it’s been three and a half years and it’s still not ready for construction.

“It’s a bit of a fiasco,” said Rep. Jason Chaffetz, R-Utah.

Chaffetz chairs the House Oversight and Government Reform committee. He went to Mexico to see the site himself, but he didn’t stay long.

“I’m not going to step in there with the dirt, with all that toxins on it,” Chaffetz said.

The estimated cost of construction has risen from $577 million to $763 million. Add on the cost of the land and the unique design, and it’s over $939 million; one of the most expensive U.S. embassies in the world.

“The State Department changed the way they build these things. They went from a Standard Embassy Design, which were coming in under budget and they were coming in swifter, and now they are now to the point where they have a new process and it’s a lot more expensive and a lot slower,” Chaffetz said.

Lydia Muniz, who heads the State Department’s Embassy Construction Bureau told CBS News in a statement that costs have grown because the original estimate was “based on a staffing plan that provided office space for approximately 890 desks,” but staffing needs have grown to 1,335 desks due to “increased bilateral activities with Mexico” on trade, drugs, and migration.

She acknowledged that the plan to award a construction contract in 2016 will not hold. Muniz flew to Mexico to meet with officials last week to discuss the Embassy project. But Patrick F. Kennedy, U.S. State Dept. Under Secretary for Management, told us last year that the agency is simply tailoring its embassies to their locations, which should save money over time.

“We have reviewed our processes and feel very, very comfortable that our use of the design initiative gets us the security we need and the functionality we need at the best possible price,” Kennedy said.

Former State Department officials told us they are worried delays in construction could mean State Department employees have to work longer in an unsafe location.

Colgate-Palmolive told CBS News it has completed all cleanup work at the site, except for a small section. Congressman Chaffetz says the company told him that the work is going to take another nine months to two years.

Puerto Vallarta News

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