On Jan. 25, President Trump issued an executive order establishing plans for the construction of this wall. A 1,250-mile wall along the United States-Mexico border will require financial backing, and aside from all of the potential political fallout which may occur between the U.S. and its southern neighbor over such an undertaking, many people on both sides of the political aisle are wondering exactly how much such a project will cost.

Companies Lining Up

More than 375 companies have told the Trump administration that they would like to help build the wall the President has proposed along the nation's southern border, including U.S. defense contractor General Dynamics Corp., Swiss cement giant LafargeHolcim Ltd., and British construction company Balfour Beatty Plc, according to a March 3 story in Bloomberg. The companies made their interest known in a presolicitation notice from the U.S. government and have not yet made formal bids. The U.S. is likely to put out a formal request by this week. Trump has estimated the wall will cost $8 billion to $12 billion, much lower than many other estimates.

The Latest Price-tag of the Wall

According Reuters, an internal report from the U.S. Department of Homeland Security estimated the wall would cost $21.6 billion, almost double the earlier estimates. The Trump campaign, and Republican House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell, previously came up with price estimates of $12 billion and $15 billion. 

"The wall is getting designed right now," President Trump said on Wednesday.  

According to the U.S. Department of Homeland Security report, it will take more than three years to fence off 1,250 miles (2,000 km) over three construction phases. The first phase extends 26 miles (42 km) across San Diego in California and Texas's El Paso and Rio Grande Valley. It would be the cheapest at an estimated cost of $360 million. The second phase stretches across 151 miles (242 km) in areas around Rio Grande Valley, including El Paso, Laredo and Big Bend in Texas and Tucson in Arizona. The last phase seals the entire border by covering 1,080 miles (1,728 km) of land.

It also gets pricier as construction progresses. Phases two and three are covering more land and may incur additional costs from covering private property and terrain that's difficult to access. 

What Are the Challenges of Building the Wall? 

On Jan. 25, Trump maintained it will be paid for "100%" by Mexico. The following day, on Jan. 26, Trump's press secretary Sean Spicer announced that Trump intended to propose funding the wall by imposing a 20% tax on all imports to Mexico. In the next two or three months, the Homeland Security Department will be securing funding from Congress to start construction by September 2017. The U.S. government already got a head start on the project, the report shows, as it's in talks with contractors and is buying steel for construction material. 

Putting up actual barriers is likely to hike up the cost, according to the report. Doing so could also face legal hurdles. The report says the U.S. government already applied for waivers to perform construction work in certain areas that are under environmental law restrictions. 

An earlier report by AllianceBernstein highlights that the border represents "huge topographical challenges to construction," spanning everything from barren desert to mountains, rivers, and more. The border includes everything from protected wildlife refuges and reserved Native American territory to privately-owned land, each of which will pose a different and sizable impediment to the construction project. Many areas of the border are also prone to flooding, and any wall built in those lands must be designed with particular precautions in mind.

In building the wall, the U.S. government also needs to settle its existing water treaty with Mexico over shared waters of the Rio Grande and Colorado River established through the International Boundary and Water Commission in 1944. Potential challenges from this agreement could add another $4 million to the unit cost of the wall, increasing it to $15 million per mile. 

 

 

 

 

 

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.