Mexico revokes US$3.7 billion China rail deal when opposition cry foul play

MEXICO has revoked a US$3.75 billion high-speed rail deal with a consortium led by China's CSR Corp Limited and China Railway Construction after its uncontested bid caused a public outcry, Reuters reports.

Opposition politicians questioned the probity of the deal that would forge a 210-kilometre (130-mile) link between Mexico and Queretaro, accusing the government of providing inside information to assist Chinese bidders and local partners.

Queretaro has repeatedly been recognised as the metropolitan area with the best quality of life and as the safest city in Mexico, says Wikipedia.

Sixteen rival bidders pulled out without explanation. Javier Corral of the centre-right National Action Party (PAN) accused the government of sharing information with the winning team ahead of time.

Germany's Siemens and Canada's Bombardier and France's Alstom were among the rival firms interested in building a rail line to move 27,000 passengers daily from Queretaro at 300 kph or 186 mph.

They all sought more time to formulate their bids, but were refused. Now the process will start again, though it is uncertain if the former bidders will renew their bids,

The transport ministry, which defended the bidding process, said it expects to re-call for tenders later this month under the same terms, and to keep it open for six months to enable wide participation.

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

The Chinese bid came with a 20-year Beijing-backed credit to cover most of the project's value, at interest rates below those available.