Mexico Scraps China High Speed Railway Deal

[sorcerer]

Remember the recent news that China Railway Corp won a $3.75 billion contract to build a high-speed rail line in Mexico? About that: AFP reports that Mexican President Enrique Pena Nieto has cancelled the deal, less than a week after it was announced. According to Mexican Transport Minister Gerardo Ruiz Esparza, Mexico withdrew from the deal to avoid "any doubts about the legitimacy and transparency" of the bidding process. The Chinese-led group had provided the only bid for the project. Now, citing "doubts and concerns in public opinion," Mexico's Transport Ministry announced that it would restart the bidding process.

As my colleague Clint explained on Monday, the China Railway Corp bid was attractive for a variety of reasons – low cost, quick construction time, and the offer to finance the vast majority of the project through the Export-Import Bank of China. Accordingly, the group may still win the contract after the new bidding process, but the decision to scrap the initial contract suggests that Chinese firms suffer from an image problem in Mexico.

In other news, as U.S. President Barack Obama and Chinese President Xi Jinping gear up for their first major bilateral summit in over a year, here's some background reading. First, U.S. Secretary of State John Kerry's speech on U.S.-China relations provides a fairly optimistic take – you can read analysis from me and from Zach parsing the language, but the speech itself is worth a look.

Second, Chinese Ambassador to the U.S. Cui Tiankai gave an exclusive interview to Foreign Policy that provides a less sanguine look at the issues in U.S.-China relations. The amount of distrust between the two sides is on full display here as Cui talks about the Hong Kong protests, cyber espionage, and the superiority of China's "election system."

Elsewhere, China Media Project looks at China's quest for a leading role in "global internet development and governance." In particular, CMP analyzes comment from Lu Wei, the chief of the State Internet Information Office and (perhaps more importantly) the head of the new Internet Security and Informatization Leading Group. One of Lu's most famous pronouncements was his declaration that "freedom means order" – that freedom of speech is inherently subject to concerns regarding social stability, as defined by the state. Under Lu, China is increasingly seeking to convince other countries to buy into its definition of internet freedom.

Finally, Gady Epstein of The Economist analyzes China's ambitious new foreign policy agenda. Xi Jinping, Epstein writes, "seems to want to demand a bigger, more dominant and more respected role for China than his predecessors, Deng included, ever dared ask for." Part of that means abandoning China's long-standing foreign policy emphasis on the U.S. in favor of other engagements. "In truth, Mr. Xi does not have much respect left for Mr. Obama; the Chinese dismiss him as weak-willed in foreign policy. And so much of Mr. Xi's ambition lies elsewhere," Epstein argues. That includes ambitious new policies at both the regional (the AIIB and the new Silk Road) and the global level (the news BRICS development bank).

Source:Mexico Scraps China High Speed Railway Deal | The Diplomat

 

[Ray]

If that is so then what happens to @CCP's thread CHINA JUMPS INTO MEXICO WITH $4.3 BILLION RAIL DEAL?
http://defenceforumindia.com/forum/china/64655-china-jumps-into-mexico-4-3-billion-rail-deal.html

is it that Mexico has got wise that the deal is no big deal?

 

[Ray]

Mexico cancels China contract for high-speed train line

Mexico has abruptly cancelled a $3.75bn (£2.3bn) contract awarded on Monday for a Chinese-led consortium to build a high-speed passenger rail link.

President Enrique Pena Nieto said he wanted to avoid "any doubts about the legitimacy and transparency" of the bidding process.

Mexico has forged closer links with China, while Mr Nieto is going to Beijing on a state visit next week.

The tender for the 130-mile rail link is being re-opened.

Mexico's communications and transport ministry said the new auction would start from mid-November and be open for about six months.

The contract was scrapped after lawmakers accused the government of favouring China Railway Construction Corp (CRCC).

Rival bids by Germany's Siemens, Canada's Bombardier and France's Alstom were considered.

According to reports, the three had asked for more time to prepare their submissions, but the requests were denied. Japan's Mitsubishi also expressed an interest.

But only CRCC and its Mexican partners had submitted a bid proposal by the 15 October deadline for the link between Mexico City and Queretaro.

It is possible that CRCC could be eligible for compensation because its contract has been withdrawn, government officials admitted.

Construction of the rail line, part of the government's plan to bolster the economy, was due to start in December, with services running from 2017.

Mexico would become the first Latin American nation to have a bullet train after Brazil and Argentina postponed their own high-speed rail projects.

"The president wants this project which is so important for Mexico to not be questioned, to have absolute clarity," Transportation Minister Gerardo Ruiz Esparza said.

"We expect more participation from train makers in the new tender," he said, adding that CRCC could still take part.

BBC News - Mexico cancels China contract for high-speed train line

Could it be that the bid was discovered to have been fraudulently won with bribes?

 

[sorcerer]

There could be other political reasons vis a vis USA. These are areas where USA and its allies who have strong political presence.
The deal itself with 85% funding by Chinese means lots of other interests in the area. I meant, USA and its counterpart does not want unhealthy competition next door.

 

[ninja85]

@CCP :taunt1:

 

[jon88]

KUALA LUMPUR, Dec 2:
China's CSR Zhuzhou Electric Locomotive Co has won the award to supply high-speed trains for the proposed 200km link between Kuala Lumpur and Ipoh.
This would result in the world's fastest inter-city bullet trains by the end of next year, reported China Daily.
What makes the contract extra significant is that the trains are also likely to be used for the southern corridor high-speed rail link between KL and Singapore, the newspaper said.
The high-speed rail link would be further extended north to Padang Besar and onward through Thailand and ending up in Kunming – bringing to fruition the vision made by Asean in the 1990s for a direct rail link to SOuthern China.
The Chinese rail firm's president, Zhou Qinghe, said the first batch of 10 trains will be produced in China while the rest will later be manufactured at a new manufacturing base being built in Malaysia.


Read more: China firm wins KL-Ipoh high-speed rail award - The Rakyat Post - The Rakyat Post


Loose some, win some. We better do not self delude ourselves and start working on a niche market uniquely Indian where we are very strong at and start exporting that. And stop saying we are the greatest in IT software... China's IT software industry is 6 times our's.