China gets $4.3 Billion Rail Deal in Mexico

The transport ministry said it had accepted the US$3.75 billion proposal by China Railway Construction Corp. for the 210-kilometre railway between the capital and the central Mexico manufacturing hub of Queretaro.

Chinese group to build Mexico’s first bullet train

MEXICO CITY: Mexico’s government – keen to forge closer ties to Beijing – picked a Chinese-led consortium on Monday (Nov 3) to build the first bullet train in Latin America after the group was the only bidder.

The transport ministry said it had accepted the US$3.75 billion proposal by China Railway Construction Corp. for the 210-kilometre railway between the capital Mexico City and the central Mexico manufacturing hub of Queretaro.

The project is part of President Enrique Pena Nieto’s decision to bring back passenger trains to Latin America’s second-biggest economy.

The government expects construction to start in December and operations to begin in 2017, which would bring the first high-speed railway to Latin America.

While Mexico has freight railways, the country now only boasts some tourist trains after regular passenger lines disappeared following the sector’s privatisation in the 1990s.

Mexican and Central American migrants have illegally hitched rides on top of a cargo train dubbed La Bestia (The Beast) to head north to the United States, a risky trip that has killed or maimed many passengers.

“In a country with 120 million inhabitants, where the main urban centres are large metropolises, passenger transport must be of massive scale,” Transport Minister Gerardo Ruiz Esparza told a news conference. “Mexico’s infrastructure must quickly get up-to-date to meet the present and future needs of the country and its regions.”

The project aims to carry 23,000 passengers per day at speeds of up to 300 kilometres per hour, reducing the commute between Mexico City and Queretaro from two-and-a-half hours to 58 minutes, officials say.

The Chinese-led consortium, which includes Mexican firms, was the only one to make a proposal by the Oct 15 deadline. The transport ministry said at the time that 16 companies decided against making a proposal, including industry giants Mitsubishi of Japan, Alstom of France, Bombardier of Canada and Siemens of Germany.

Ruiz Esparza sought to explain why only one group had presented a bid, saying that on average, only two companies make bids for high-speed train projects worldwide.

Brazil and Argentina have struggled to turn their own projects into reality. Brazil first announced plans for a high-speed train in 2010 but Latin America’s economic powerhouse has repeatedly postponed the US$16 billion project to link Sao Paulo and Rio de Janeiro.

Last year, the government said it was delaying the bidding to give companies more time to make proposals after only one firm appeared to be ready to enter the contest.

Argentina’s plans for a Buenos Aires-Cordoba high-speed rail link were put on hold in 2008 due to the country’s financial difficulties.

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