China-led group sole bidder for Mexican rail construction deal

Potential project brings added global recognition for high-speed credentials

A Chinese-led consortium has become the sole bidder to build a high-speed passenger railway line connecting Mexico City and the central city of Queretaro, according to an announcement by Mexican Ministry of Communications and Transportation.

Queretaro is the center of Mexico's aerospace industry, and the government plans to run a railroad that can move 23,000 commuters from the city at speeds of up to 300 kilometers per hour. The bidding process began in the middle of August.

The eight-company group is led by China Railway Construction Corp Ltd and China South Locomotive and Rolling Stock Co, and it was the only group to submit a proposal before the deadline.

Even though the final cost for the connection is still unclear, the investment package has been estimated at more than $4 billion. The Mexican government wants to start construction in December and the line is expected to be operational in 2017.

Feng Hao, a researcher at the Institute of Comprehensive Transportation at the National Development and Reform Commission, said the development was significant in that it underlines that China has the ability to export not only its expertise but also its high-speed trains to an overseas market.

"High-speed trains with operational speeds of over 300 kilometers per hour have been running in China for more than five years in various terrain and climate conditions, and foreign nations are fully aware of this fact," said Feng.

Because of the time limit, a total of 16 international companies decided not to make a proposal, including global engineering majors such as Siemens AG of Germany, France's Alstom SA, Mitsubishi Corp of Japan and Canada's Bombardier Inc.

The Mexican ministry said this does not mean that the Chinese-led conglomerate, which includes four Mexican member companies, has won the contract, adding the bidding process could start again if its proposal did not meet the requirements.

The Mexican government will announce the result on Nov 3.

"Chinese infrastructure companies still have advantages in material prices, logistics, overseas working experience and construction times and technologies. They definitely have the edge to compete with rivals from other emerging markets," said Zhao Jian, a professor of rail transportation at Beijing Jiaotong University.

The new project is part of Mexican President Enrique Pena Nieto's decision to bring back passenger trains, which all but disappeared more than a decade ago, except for some tourist lines.

Zhao said that from a long-term perspective, the Mexican economy will count on enhanced rail connectivity in future, especially passenger services, to stimulate trade and tourist sectors as well as attracting investment from the United States and other industrial nations.

The announcement comes a week after an agreement was reached for China to build Russia's first high-speed railway line.

Chinese firms and their Russian partners will hold talks on design, financing, and construction of a 770-km high-speed line connecting Moscow and Kazan, an important metropolis on the Volga River.

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