https://www.wsj.com/articles/as-trump-orders-mexican-border-wall-questions-rise-over-who-will-build-it-1485383784
As Trump Orders Mexican Border Wall, Questions Rise Over Who Will Build It
Shares in some construction, infrastructure and heavy-equipment companies get boost, but hurdles loom
Mexico-based concrete and cement giant Cemex has a number of facilities close to the border on both sides, analysts say. Its shares rose 4% Wednesday. Photo: Susana Gonzalez/Bloomberg News
Andrew Tangel and
Andrew Tangel
BiographyAndrew Tangel
@AndrewTangel
andrew.tangel@wsj.com
Bob Tita
BiographyBob Tita
@bob_tita
robert.tita@wsj.com
Updated Jan. 25, 2017 5:48 pm ET
President Donald Trump said construction of a wall on the U.S.-Mexican border would start in months, raising questions about who would actually build it.
Shares in some construction, infrastructure and heavy-equipment companies rose on Wednesday as investors weighed which firms stood to benefit from Mr. Trump's proposal to build a wall along the approximately 2,000-mile border between the two countries, which would count among the country's biggest infrastructure projects if it comes to fruition.
There are a number of hurdles. Currently 654 miles of the country's border with Mexico has fencing, according to a U.S. Customs and Border Protection spokesman. Portions of the border pose construction challenges. Much of it is open desert, and in many places, roads would first need to be built to reach the border, and then a barrier constructed.
President Donald Trump said his executive orders creating a wall on the Mexico border and tightening U.S. immigration enforcement will "save thousands of lives and millions of jobs." Photo: REUTERS
It wasn't immediately clear how the federal government would go about seeking proposals from companies, how long a procurement might take and how it would ultimately be funded.
The White House offered no cost estimate for the project, but outside experts say an end-to-end fence could easily cost $10 billion and possibly much more, depending on details. A wall would be even more.
Mr. Trump said the wall was "very badly needed." He added, "This will also help Mexico by deterring illegal immigration from Central America and by disrupting violent cartels networks."
The Portland Cement Association, which represents powdered cement manufacturers, estimates that an all-concrete border wall that is about 35 feet tall and as thick as 10 inches, would require 7 million metric tons to 13 million metric tons of cement to construct and take five years complete. "But we don't know yet what is meant by a wall," said Edward Sullivan, chief economist for the association. "We don't know what material it would be made of."
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"The size doesn't bother me," said William Sandbrook, chief executive of U.S. Concrete Inc., a Texas-based supplier of ready-mix concrete. His company, which provided concrete for the Freedom Tower in New York City, said the remote stretches of land along the border would require concrete suppliers to rely on portable plants. "It's just a matter of resource: the number of plants and the number of trucks."
The timetable for the project would likely determine the level of demand for construction equipment such as cranes and construction excavators, and whether contractors buy or rent machinery, according to Matthew Flannery, chief operating officer for equipment rental chain United Rentals Inc. "The shorter the duration, the more potential for rental," he said.
The fencing that is already in place included a number of companies that had contracts overseen by the U.S. Army Corps of Engineers. A representative for one of them, California-based Granite Construction Inc., didn't immediately respond to a request for comment. The company's stock was up 3% to $59.58 Wednesday.
Mexico-based concrete and cement giant Cemex SAB has a number of facilities close to the border on both sides and is the best-positioned building-materials company, according to the analysts at Sanford C. Bernstein & Co., who estimated in a July 2016 note the wall could cost $15 billion, 5% of which would be spent on concrete. "No matter who builds it, it's very much likely that Cemex is going to play an important role," said Nick Timpson, one of its analysts.
The company's shares have risen recently in part because of Mr. Trump's expected plans for overall infrastructure spending. Its shares rose 4% Wednesday. Cemex declined to comment.
Tutor Perini Corp. , a California-based construction firm, led the sector rally as its shares climbed almost 10% Wednesday. Shares of Los Angeles-based consulting firm AECOM were up 5%, while Birmingham, Ala.-based aggregates supplier Vulcan Materials Co. rose 2%. Vulcan declined to comment and representatives of Tutor Perini and AECOM didn't immediately respond to requests for comment.
The proposed plan for a wall has also attracted interest from defense companies that already provide higher-tech solutions such as surveillance drones and sensor towers to monitor borders in the U.S. and overseas.
Israel's Elbit Systems Ltd. provides watchtowers along a stretch of the Arizona border equipped with infrared cameras and other sensors. Others such as L-3 Technologies Inc. and Leidos Inc. have expanded their border security businesses, with the latter spotting potential opportunities from the tightening of some controls in the European Union.
Previous efforts to use technology to tighten U.S. borders have a checkered history. Boeing Co. led a failed attempt to set up a surveillance fence with watchtowers along the Mexican and Canadian borders that was scrapped in 2011 by the Department of Homeland Security because of cost-overruns and technical challenges.
"This is not an area we are actively pursuing," Boeing CEO Dennis Muilenburg said Wednesday, though said it was ready to provide some "technology and capabilities" such as its ScanEagle drone.
Mr. Muilenburg has discussed defense systems a number of times with Mr. Trump, but hasn't talked about border security, according to a person familiar with their dialogue.
—Doug Cameron contributed to this article.
Write to Andrew Tangel at Andrew.Tangel@wsj.com and Bob Tita at robert.tita@wsj.com