It’s really happening.
President Donald Trump will sign an executive order on Wednesday to begin funding and construction of a border wall between the US and Mexico, fulfilling one of his longest-held campaign promises.
It’s highly unlikely that Mexico will pay for the wall — Mexican lawmakers have repeatedly said they will not — so the substantial cost will likely fall on the US government.
To get a sense of just how massive the undertaking of the wall will be, analysts at Bernstein calculated the possible costs in a note to clients back in July. The estimated price tag will be at least $15 billion according to the analysts, and possibly as much as $25 billion.
Now, the Bernstein note does make some assumptions and since Trump has not yet provided the exact details of the dimensions of the wall, we’ll have to work with those for now.
The Bernstein analysts base their cost estimate on the current price of the existing border along with additional costs Trump’s wall would incur.
“The cost to build the ‘easiest’ sections of the existing fence were between $2.8-3.9 million per mile according to the US Government Accountability Office,” said the Bernstein note. “However, given that these figures exclude labour costs, land acquisition costs and relate to construction in accessible areas with favourable construction conditions, the cost of Trump’s Wall is widely expected to be greater than $15 billion and perhaps as much as $25 billion.”
They predict the wall will be 40 feet tall, run 1,000 miles, go 7 feet underground (to prevent tunnelling), and have a thickness of 10 inches. The simplest construction material to use would be concrete, according to the analysts, and based on concrete prices and the estimates size of the wall that cost alone would be around $700 million.
Bernstein does note that materials suppliers in the Southwestern US and Mexico could stand to gain significantly from the project’s construction since it would be difficult to transport the large amounts of materials needed across long distances. From Bernstein:
“What is less clear at this stage is whether US- or Mexico-based suppliers will benefit. In fact, despite arguments concerning which government will pay for construction, the large quantities of materials required may necessitate procurement from both sides of the border. Cemex appears best positioned regardless, with cement, RMX and aggregates facilities throughout the border region. Other companies who we would expect to benefit the most include CalPortland, GCC, Martin Marietta and Vulcan.”
Additionally, there will be challenges in building the wall given the topography of the border areas. From the note:
“The border presents huge topographical challenges to construction. It runs through remote desert in Arizona, over rugged mountains in New Mexico and, for two thirds of its length, along rivers. The region also includes protected wildlife refuges, Indian territory and ranches whose owners are unlikely to willingly agree to sell their land to the federal government. Allowances must be made for flooding, since the border crosses numerous floodplains.”
Add that onto the fact that Trump has planned $550 billion in infrastructure spending and reportedly has already prioritised $137 billion in projects across the US, and there will be a lot more government spending coming from the Trump administration.
At the time of the note, July 2016, the Bernstein analysts said the wall sounded “ludicrous” but now their analysis may come in handy given that the “ludicrous” plan is coming to fruition.