Mexico scraps $3.75-billion China rail deal ahead of state v Mexico has revoked a $3.75-billion (U.S.) high-speed rail contract from a Chinese-led consortium after its uncontested bid prompted an outcry from lawmakers, souring a state visit to China next week by President Enrique Pena Nieto.
After the contract to build the link was awarded on Monday, opposition politicians accused the government of favouring the group led by China Railway Construction Corp Ltd., the sole bidder. Mexico’s communications and transport ministry said late on Thursday it would now hold a fresh tender.
“The president is sensitive to the fact that there should be no doubts about a project this important and of such benefit for society,” the ministry said in its statement.
Since Pena Nieto took office in late 2012, he has tried to forge closer ties with China after years of manufacturing rivalry between two nations seeking to supply the U.S. market.
Announcing the contract on Monday, Mexico’s government said the 210-km (130-mile) line to connect Mexico City and the central city of Queretaro would cost 50.82 billion pesos ($3.74-billion U.S.), including the build cost and five years of operation.
The proposal came with a 20-year, Chinese government-backed credit to cover most of the project’s value, at interest rates below those available even to Mexico’s government.