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Business / Companies

CRCC seeks compensation for Mexico high-speed project

(chinadaily.com.cn) Updated: 2015-02-03 14:24

CRCC seeks compensation for Mexico high-speed project
A CRH (China Railway High-speed) train runs on the rail in Shanghai, April 8, 2009. [Photo/IC]

China Railway Construction Corp Ltd (CRCC) said on Tuesday that Mexico high-speed project's "indefinite suspension" would not impact its overseas operation, adding that the company is negotiating with the government of Mexico on the project's compensation.

The government of Mexico cut its 2015 budget by nearly 3 percent last Friday after a drop in global oil prices hurt public finances, and decided to shelve a project to build the rail link between Mexico City and the central city of Queretaro.

CRCC shares fell 6.42 percent and 9.91 percent respectively on Jan 30 and Feb 2.

CRCC said the Mexico high-speed project's shelving is an individual case and wouldn't have an effect on its overseas operations, according to an official announcement. The company is negotiating with the Mexico government on the project's compensation.

The Chinese-led consortium, formed by CRCC, CSR and four other Mexican construction firms, won the bid last November to build a 210-km high-speed railway connecting Mexico City with the industrial hub of Queretaro to the north. However, the contract was revoked days later out of domestic issues.

Related story: China wants Mexico to protect rights of Chinese firms, by Lan Lan, chinadaily.com.cn

The Chinese government said on Monday it hopes the Mexican government could properly deal with the problems caused by the suspension of it high-speed rail project.

The comment came after the Mexican government announced to indefinitely suspend the high-speed rail project linking Mexico City with the industrial hub Queretaro.

"We feel really sorry about the decision. Chinese companies have spent enormous efforts in bidding for the projects," the NDRC said in a statement.

The Chinese side hopes the Mexican government could effectively protect the legitimate rights of the Chinese companies and adopt active measures to promote pragmatic cooperation between the two countries, said the statement.

China Railway Construction Corp and several Mexican construction firms, whose original winning bid said they would bid again for the $3.75 billion project, after the Ministry of Communications and Transport of Mexico said it would relaunch bidding for its first high-speed railway in mid January.

 

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