China seeks compensation after high-speed project suspended

An angry China has demanded adequate compensation from Mexican government after the country suspended the USD 3.7 billion high-speed train contract won by Chinese companies.
China has demanded that Mexico adequately compensate Chinese companies which bid on a proposed high-speed railway in the North American country, a project the Mexican government said is being suspended because of falling oil prices, state-run China Daily reported.
Chinese government called on the Mexican government to respect the legal rights of Chinese firms, it said.
It was a disappointment for Beijing as it was the fist overseas high speed train contract its firms have won.

After constructing over 16,000 km of bullet train tracks in China, Chinese firms are aggressively marketing their technology abroad.
Chinese firms have undertaken a free feasibility study to build Chennai-New Delhi bullet train corridor.

Luis Videgaray Caso, Mexico's secretary of finance and public credit, said that the "indefinite suspension" was the result of falling oil prices and the need to cut public spending.
The Mexican government derives about a third of its revenue from the oil sector.
"We feel really sorry about the decision. Chinese companies have invested much in bidding for the project," China's National Development and Reform Commission (NDRC) in a statement.

China hopes the Mexican government will deal with the problems caused by the suspension of the project appropriately, effectively protecting Chinese companies' legitimate rights, and adopt active measures to promote pragmatic cooperation between the two countries, the statement said.
The bid was won by a Chinese-led consortium last November but the Mexican government later abruptly annulled the result following allegations of irregularities.
The China Railway Construction Corporation (CRCC), which led the consortium in the last tender, had recently decided to re-enter the bidding.
Aside from the Chinese-led consortium, companies from Canada, France, Spain and Italy had also hoped to participate in a fresh round of bidding.

Gerardo Ruiz Esparza, the Mexican transport secretary, said the rail line, which was to have covered the 220km between Mexico City and the industrial hub of Queretaro, was suspended, but not cancelled.
As for the amount of any proposed compensation, negotiations are said to be under way, and no formal announcements have been made.
But CRCC is very confident about the outcome, Yu Xingxi, secretary general of CRCC said.