Chinese to build rail in Mexico

A Chinese-led consortium has won the bid to build Mexico's first high-speed train project, the first overseas use of Chinese bullet trains.

Mexico's Ministry of Communications and Transport announced on Monday that the group, headed by China Railway Construction Corp and including a handful of Mexican construction firms, had been granted the contract to bring the first high-speed rail line to Latin America.

The 50.8 billion peso ($3.7 billion) project involves building a 210-kilometer high-speed line to connect the capital, Mexico City, with the growing industrial hub of Queretaro to the north by 2017. Upon completion, the bullet train will cut travel time from about two and a half hours to less than an hour, with trains traveling at a maximum of 300 km/h.

All key technologies will be developed by China, while Chinese companies will manufacture the trains, control systems and major track parts.

China Railway Construction Corp will be responsible for the line's design, construction, equipment installation and operation maintenance.

"This project will become a milestone for China's high-speed railway sector because it will adopt a whole set of Chinese technologies, equipment and standards," said professor Sun Zhang, a railway researcher at Tongji University in Shanghai. "In the past, Chinese enterprises only did construction for foreign lines or exported some equipment."

Sun added that "this achievement indicates that our comprehensive capability in the railway industry has been recognized by the world".

Wang Mengshu, a tunnel and railway expert at the Chinese Academy of Engineering, said China has rich expertise and experience in designing, building and operating high-speed rail networks.

In addition, the country boasts a flexible approach toward funding cooperative programs, he added, explaining that foreign nations with financial difficulties are encouraged to repay their share of the investment with local resources.

Pablo Suarez Coello, director of rail transportation at the Mexican Transport Ministry, told local media that the Export-Import Bank of China will finance 85 percent of the project.

The project is part of President Enrique Pena Nieto's decision to revive passenger trains, which were largely abandoned in a 1990s privatization of the industry.

The president announced in 2012 that his government would promote several rail projects to help boost the economy and improve communications.

A second high-speed train is being considered to link Mexico City with Toluca, the capital of Mexico State.

Feng Hao, a transportation researcher with China's National Development and Reform Commission, expected that the success of Chinese railway companies will help them obtain contracts for high-speed railway projects in the United States and Brazil in the near future.

Chinese rail infrastructure companies have advantages in terms of material costs, logistics and construction time, he added.

Zhao Jian, a professor at Beijing Jiaotong University who specializes in China's railway system, told Shanghai's Oriental Morning Post that China has witnessed an excess in production capacity in the railway sector, so the government and industry should strive to strengthen exports of rail technology and projects to boost the sector.

Industry giants in the field are also poised to prepare for a rapid expansion in overseas markets, with reports saying the two major train manufacturers in China, CNR Corp and CSR Corp, will soon merge.

Trading in shares of the two companies continued to be suspended on Tuesday due to an important issue still outstanding.