Mexico pays Chinese rail firm over 100 million yuan after pulling out of bullet-train deal

Mexico pays Chinese rail firm over 100 million yuan after pulling out of bullet-train deal :Mexico has compensated a Chinese-led consortium with over 100 million yuan after its government cancelled a rail contract that the group had earlier won.

The Mexican government proactively paid the China Railway Tunnel Group its costs incurred in taking part in the tender of the high-speed railway project, The Beijing News quoted Professor Wang Mengshu as saying.

Wang is the consortium’s deputy chief engineer and the Chinese government’s senior scientific advisor on high-speed railway projects.

The compensation comes after China Railway Construction on November 11 threatened legal action against the Mexican government over its decision to revoke the US$3.75 billion contract to build a 210km rail link between Mexico City and Queretaro state.

Mexico’s Communications and Transport Secretary Gerardo Ruiz Esparza previously said the government would pay the winning bidder non-recoverable costs, but did not give an estimate of how much that would be.

The contract had been awarded to China Railway and its partners on November 3, after all other potential bidders bowed out, arguing that they did not have enough time to prepare their bids in the two-month process.

But on November 6, the Mexican government annulled the deal over public concerns about the bidding process. Just two days later, Mexican media reported that President Pena Nieto’s wife Angelica Rivera was living in a US$7 million mansion registered under the name of a Mexican firm that was part of the winning consortium.

Mexican officials said the contract’s cancellation was not related to concerns over the mansion, but rather the need to “strengthen the absolute clarity, legitimacy and transparency” of the bidding process. The government will open a new round of bidding.

Wang said the China Railway-led consortium is currently in Mexico again, negotiating on the new tender. He added that relations between the group and the Mexican government were harmonious.

Wang believed the consortium’s chances of winning the new tender were high because their competitors, including companies from Japan and Turkey, could not offer a comparable standard of construction and maintenance support, he said.

Mexico pays Chinese rail firm over 100 million yuan after pulling out of bullet-train deal

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