Mexico defends decision to scrap Chinese train deal

Leticia Pineda
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Mexico withdraws a multi-billion-dollar tender awarded to a Chinese-led consortium to build the country's first bullet train

Mexico withdraws a multi-billion-dollar tender awarded to a Chinese-led consortium to build the country's first bullet train (AFP Photo/Yuri Cortez)

Mexico City (AFP) - Mexico on Friday defended its abrupt decision to scrap a bullet train deal with a Chinese-led consortium and seek new bids after the opposition questioned the legality of the process.

President Enrique Pena Nieto canceled the $3.75 billion tender late Thursday, just three days after the sole bidder, a group headed by the China Railway Construction Corp., won the contract to build Latin America's first high-speed rail.

Pena Nieto will likely have to personally explain his decision to Chinese President Xi Jinping when he flies to China on Sunday for an Asia-Pacific summit and a state visit.

The Chinese-Mexican consortium faced no opposition when it was picked Monday to build the 210-kilometer (130-mile) line between Mexico City and the central manufacturing hub of Queretaro.

Companies had been given just 60 days to present an offer even though some had asked for more time.

Sixteen firms had initially shown interest -- including industry giants Mitsubishi of Japan, Alstom of France, Bombardier of Canada and Siemens of Germany -- but ultimately stayed out of the contest.

Transport Minister Gerardo Ruiz Esparza said the government would likely reopen the bidding in late November and give companies six months to submit an offer.

"Hopefully there will be more participants this time," Ruiz Esparza told Radio Formula, insisting that the Chinese group had made an "extraordinary offer" and would likely submit a new bid.

The newspaper Reforma reported that the Mexican companies in the consortium are close to Pena Nieto's Institutional Revolutionary Party (PRI), while senators voiced concerns about the way the contract was awarded during a hearing with Ruiz Esparza on Thursday.

Senator Javier Lozano told the minister that his conservative National Action Party had "serious doubts, questions, worries about the legality and transparency of this bidding process."

The transport minister told local media everything had taken place within the law but that the government decided to restart the bidding to avoid "any doubts."

"The essential thing for such a beneficial project is to not give the impression that there was favoritism," Ruiz Esparza said.


- Human rights crisis -


Pena Nieto has sought closer ties with China since he took office in December 2012, treating Xi to a lavish state visit last year.

The Mexican leader leaves Sunday for an Asia-Pacific Economic Cooperation (APEC) summit in Beijing before a two-day state visit in China.

Pena Nieto already had to shorten his trip, which includes a G20 summit in Australia, due to a growing human rights scandal over the disappearance of 43 college students who were attacked by gang-linked police in September.

"He will probably tell the Chinese that he wants the rules of the game to be transparent and he will surely explain the domestic political situation," Adolfo Laborde, foreign relations expert at the Monterrey Technology Institute, told AFP.

Opposition Senator Javier Corral said the country was in "a delicate time."

"There's a time bomb because there's a social outcry against impunity, the collusion between criminals and authorities," Corral told Ruiz Esparza.

"It's a very complex moment. How can we add bidding processes set up to favor friends or people or companies close to the government party or the president?"

Prior to scrapping the deal, the government had expected construction to start in December and operations to begin in 2017.

Ruiz Esparza said Pena Nieto wants the train to start running before his single six-year term ends in December 2018.

The high-speed rail project is part of Pena Nieto's plan to bring back passenger trains to Latin America's second-biggest economy, which all but disappeared after the sector was privatized in the 1990s.

The project aims to carry around 25,000 passengers per day at speeds of up to 300 kilometers (186 miles) per hour, reducing the commute between Mexico City and Queretaro from two-and-a-half hours to 58 minutes.