China’s CRCC to receive compensation from Mexico for canceling rail project

China Railway Construction Corporation (CRCC) is reportedly set to receive $1.31m in compensation from Mexico for cancelling a $3.75bn high-speed rail contract.

Mexico’s Communications and Transport Ministry deputy minister Yuriria Mascott was quoted by Reuters as saying the government had carried out an analysis of CRCC’s costs.

Mascott said: “The legal team informed me that what is to be expected is almost Mex$20m.”

A consortium consisting CRCC and CSR Corporation had won the project last year, which was cancelled after the government was accused of favouring the group.

In November last year, Mexico’s Transport and Communications Ministry awarded the contract to design, build, operate and maintain a 210km-long high-speed line between Mexico City and the central city of Queretaro.

The Mexican Government relaunched the bid in January, but cancelled it for a second time citing budget cuts.

The project is expected to carry 27,000 daily passengers from Queretaro to Mexico City at a maximum speed of 300km/h (186mph).

If the contract was not cancelled, the Export-Import Bank of China (EximBank) was to finance 85% costs of the project, which was expected to create 20,000 direct jobs and take 18,000 passenger cars off the road.

Other bidders, including Siemens, Bombardier and Alstom, had expressed interest to participate in the bidding process.