Business

Mexico cancels China contract for high-speed train line

  • 7 November 2014
  • From the section Business
Man sitting on top of a Mexican freight train Image copyright AP
Image caption Hitching a lift on a Mexican freight train is a common way of getting around the country

Mexico has abruptly cancelled a $3.75bn (£2.3bn) contract awarded on Monday for a Chinese-led consortium to build a high-speed passenger rail link.

President Enrique Pena Nieto said he wanted to avoid "any doubts about the legitimacy and transparency" of the bidding process.

Mexico has forged closer links with China, while Mr Nieto is going to Beijing on a state visit next week.

The tender for the 130-mile rail link is being re-opened.

Mexico's communications and transport ministry said the new auction would start from mid-November and be open for about six months.

The contract was scrapped after lawmakers accused the government of favouring China Railway Construction Corp (CRCC).

Rival bids by Germany's Siemens, Canada's Bombardier and France's Alstom were considered.

According to reports, the three had asked for more time to prepare their submissions, but the requests were denied. Japan's Mitsubishi also expressed an interest.

But only CRCC and its Mexican partners had submitted a bid proposal by the 15 October deadline for the link between Mexico City and Queretaro.

It is possible that CRCC could be eligible for compensation because its contract has been withdrawn, government officials admitted.

Construction of the rail line, part of the government's plan to bolster the economy, was due to start in December, with services running from 2017.

Mexico would become the first Latin American nation to have a bullet train after Brazil and Argentina postponed their own high-speed rail projects.

"The president wants this project which is so important for Mexico to not be questioned, to have absolute clarity," Transportation Minister Gerardo Ruiz Esparza said.

"We expect more participation from train makers in the new tender," he said, adding that CRCC could still take part.

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