Surprise as Mexico rail contract withdrawn

China hopes Mexican case can be settled properly as soon as possible

China expressed surprise on Sunday at Mexico's decision to revoke a $3.75 billion high-speed rail contract from a China-led consortium, saying the Chinese company involved has strictly followed the bidding procedure.

After the contract to build the link was awarded on Oct 3, Mexican opposition politicians accused their government of favoring the group led by China Railway Construction Corp, the sole bidder.

Mexico's Communications and Transport Ministry, which has defended the bidding process, said on Friday it expects to rerun the tender for the project under the same terms, and will keep it open for six months to enable all interested parties to take part.

The high-speed line will link Mexico City with the industrial hub of Queretaro.

Mexico decided to withdraw the deal with a Chinese-Mexican joint consortium because of domestic factors, China's top economic planner said.

A spokesman for the National Development and Reform Commission said the withdrawal has nothing to do with the Chinese enterprise, and the Chinese government hopes the case can be settled properly as soon as possible.

The spokesman said it is surprising that Mexico has decided to scrap the deal, as the Chinese enterprise has strictly followed the public bidding procedures and requirements.

The bidding content complies with Mexican government requirements, the spokesman added.

China encourages enterprises to take part in infrastructure construction in Mexico in a mutually beneficial way and hopes the Mexican government can create a fair competitive environment for these enterprises, the spokesman said.

In a statement issued on Sunday, China Railway Construction Corp said it was shocked to learn about the cancellation.

The company has launched an emergency plan to deal with it. It has formed a team of legal experts and will "resort to legal means to safeguard the legal rights of the company".

"The cancellation is totally due to factors in Mexico and has nothing to do with our company," the statement said.

A statement from the Mexican Ministry of Communications and Transport said the bidding has been legitimate, adding that President Enrique Pena Nieto's decision to scrap the deal is aimed at ending any public doubts about the project.