China rail builder seeks compensation over canceled Mexico bullet-train project

A consortium led by CRCC, which included a number of Mexican partners, won the contract in November. The contract was canceled days later amid concerns that several Mexican partners had ties to ruling-party officials and government officials.
A consortium led by CRCC, which included a number of Mexican partners, won the contract in November. The contract was canceled days later amid concerns that several Mexican partners had ties to ruling-party officials and government officials.

By Carlos Tejada / Wall Street Journal

A Chinese rail-construction company is seeking compensation from Mexican officials stemming from a halted $3.7 billion Mexican high-speed-rail project.

In a statement Tuesday to the Shanghai stock exchange, China Railway Construction Corp. said it was still in negotiations with “the Mexican side and will update if there is important progress.” It didn’t offer further details but said the postponement won’t have a major effect on its operations.

In November, CRCC warned it would resort to legal means to protect its interests after the contract was revoked.

The halt on construction of the roughly 130-mile bullet-train line, from Mexico City northwest to Querétaro city, has become a sore point in China. On Monday, China’s National Development and Reform Commission, the country’s top economic-planning body, called on Mexican officials to protect the rights of Chinese companies.

“We feel really sorry about the decision,” the NDRC said. “Chinese companies have invested much in bidding for the project.”

Officials at the Mexican embassy in Beijing didn’t immediately respond to requests for comment.

Mexico postponed the project last week as part of an effort to cut government spending by $8.3 billion amid an adverse economic environment and falling oil prices, as Mexico is a significant oil producer.

http://www.wsj.com/articles/china-rail-builder-seeks-compensation-over-canceled-mexico-bullet-train-project-1422949509

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