The Xochi project, which involves the construction of a 31-kilometer bypass on Guatemala's southern coast, includes a 200-hectare industrial city in Santo Domingo, Suchitepéquez, with a model that will integrate residences, commerce, and industrial parks.

 The information was confirmed by Carlos Colom, chairman of the project's Board of Directors, to the Guatemala Moving Forward team from Prensa Libre and Guatevisión, who traveled to the site to report on the progress of the work.

The idea is to transform the area into a mixed-use real estate complex that includes manufacturing, logistics, housing, education, health, commerce, offices, recreation, and entertainment, the executive added.

The first phase will cover around 16% of the entire area of Ciudad Xochi and will begin development during the first quarter of 2026 with the installation of convenience stores, the establishment of premises providing automotive and agro-industrial services, and the construction of an industrial block.

 Ciudad Xochi: a potential industrial capital

“We are trying to attract large-scale industry from abroad with the nearshoring phenomenon so that it sets up in Ciudad Xochi and generates better quality jobs. We are working with one of the largest universities in Guatemala to establish a major campus where people from the area can study and train,” adds Colom.

 Jorge Benavides, an analyst at Fundesa, points out that this area of the country has around half a million inhabitants, which “provides a sufficient labor force, for example, in manufacturing, as in the case of automotive harnesses and the automotive industry. An automotive harness manufacturing company is planning to open a new plant in this area.” He adds that there is potential to boost the textile and food industries.

 This city will be connected to the urban centers of Retalhuleu (45 km away), Cocales (35 km away), Xela (60 km away), and Guatemala City (130 km away).

 As part of the National Competitiveness Policy, this hub is defined as one of the main intermediate cities in the south, stretching from Mazatenango to Coatepeque, with the highest concentration in Retalhuleu.

 For Benavides, the development of this intermediate city could serve as a bridge to attract more productive investment and improve port access to the Pacific, the border with Mexico, and the connection with the central-southern corridor, which links the department of Guatemala with the port in Escuintla.

 With this new productive area in the south, there is “the possibility that people who are already training in professional and technical fields in the area will have a place to work and earn higher incomes. This natural internal mobility would then contribute to reducing irregular migration to the north,” adds Benavides.

 Traffic bypass

Xochi, or the Corredor de las Flores, is a route eagerly awaited by travelers and transporters who currently have to travel on the CA-2, from km 172 to 142, through the municipalities of Cuyotenango, Mazatenango, San Bernardino, and San Antonio, a journey that can take between two and four hours or more. With this toll road, that time could be reduced to 30 minutes, according to the company's projections.

 The highway will have 23 bridges, 18 vaults, four overpasses, more than 20 large drainage boxes, and more than three million cubic meters of material. Twelve companies prequalified for its construction, nine submitted bids, and the 23 bridges were distributed among five companies, which built them in parallel.

 “The highway was also put out to tender and awarded to a company that has worked with many subcontractors. In addition, there is a package of complementary works that include drainage, administrative buildings, toll booths, intelligent information systems, and project signage. For this, we held another tender and awarded the contract to the companies that submitted the most competitive bid in terms of price and quality,” explains Colom.

 More than 15 contractors have worked on the project in parallel, creating around 1,600 direct jobs and twice or three times as many indirect jobs. To date, 18 bridges have been completed and five are under construction. In terms of progress, Colom estimates that “the highway is currently 65 to 70% complete.”

 According to the Xochi project projections, three out of every 10 vehicles will use this alternate route, while seven out of every 10 will continue to travel on the CA-2. The 30% that use the bypass will have to pay a toll, the rate for which has not yet been defined.

 Although no amount has been set, the Guatemalan Chamber of Transportation and Cargo proposes the use of this alternate route. According to José Alejandro Ramírez, executive director of the chamber, “the toll cost is worth paying because it benefits our operations. We are going to pay or spend the same amount waiting in line, and here we are going to pay a toll that will allow us to move quickly.”

 Currently, due to slow traffic, it is estimated that there is a 20% cost overrun and an inefficiency of more than 30%.

 Colom points out that "these are only 31 km of the more than 2,000 km that Guatemala needs per year. We hope that by October 2025 or the end of this year, the project will be up and running in record time.“ He adds that ”the challenge is to finish building the road, do the fillings, build the subbase, the black base, and the wearing course," that is, the final surface on which vehicles will travel.

 According to Gian Franco Carassale, Director of Infrastructure and Energy for Central America, the Caribbean, and Mexico (a.i.) at IDB Invest, a unit of the Inter-American Development Bank, the project is currently in the embankment construction phase. "This construction has been carried out taking into account the productive areas on either side of the highway. Therefore, it was necessary to build overpasses to allow harvest trucks to pass," explains the director.

 Carassale estimates that the road should be operational early next year. “We expect construction to be up and running early in the second quarter of next year. The exact date will depend on progress during the rainy season, which is set to begin in a couple of months,” he adds.

 Right of way: 200 years in 8 years

To begin construction, Xochi's team acquired the land where work is now underway. After more than 200 negotiations over approximately eight years, they laid the first stone in September 2023.

 The first step was to establish right of way, an issue on which, according to Colom, “Guatemala is a complicated country.” He adds: “The negotiations were long and complex, but we have now concluded them and are therefore building the highway. The challenge here is that it is no use having 99% of the right of way... you must have 100%.”

Another challenge at the start of the project was obtaining permits from various government agencies, licenses, and municipal paperwork. “If Guatemala wants to generate more investment and infrastructure projects, such as developments of all kinds, ports, airports, and highways, it must streamline the entire permitting process. Although our experience has been positive, we believe that the process should be faster.” In addition, technical discussions with the Ministry of Communications, Infrastructure, and Housing, according to Colom, took “quite a long time, but it was a very professional process.” He adds that consideration was given to how “this project could be designed to complement the national road network. There were lengthy discussions and protracted processes to evaluate design A, design B, how to interconnect, and what documents would give us certainty that these interconnections with the national network are solid.”

 A new model for public works

Currently, Guatemala has “one meter of road per inhabitant, when we should have at least three,” Colom points out. For this reason, he believes it is essential for the state to change the construction model in order to increase the number of kilometers built per year. "I think an important step in the right direction is to modernize the Public-Private Partnerships Law. Another option is the Priority Road Infrastructure Law; I believe that projects can be developed through the state with a new model," he explains.

Although this project aims to reduce travel time on a 31-kilometer stretch, other roads still need to be built to complement it. “What we need is for the connection with the rest of the roads and ports not to become a bottleneck, because we are going to be very fast here, but we will encounter other roads and another logistics hub where queues of two or three days will form again,” explains Ramírez.

The Guatemalan Chamber of Transportation and Cargo believes that roads should be built away from urban areas to avoid mobility restrictions and problems arising from passing through commercial areas and towns. Ramírez points out that “in the absence of major government projects, this (Xochi) is a solution.”

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