China Railway Construction turning to legal means after Mexico deal

China Railway Construction Corp. said it would resort to legal means to protect its interests after the Mexican government revoked a USD 4 billion deal with a Chinese-led consortium.
“The company is extraordinarily shocked by Mexico’s decision. The bidding for the high-speed rail project complied with the requirements of the Mexican government,” state-run China Railway Construction said in a statement through its verified account on the Tencent Weibo social-media service.
The company also said it has set up a legal team and will resort to legal means to protect its legitimate interests if necessary.
This past Tuesday, China Railway Construction said it won a Mexican rail project valued at USD 4 billion with a consortium of six companies including state-owned train car maker CSR Corp. The other four companies in the consortium are Mexican.
CSR also confirmed the cancellation of the deal by the Mexican government. “We will continue to keep in contact and communicate with the project owner. We will make announcements in a timely manner for any significant progress,” CSR said in a filed statement with the Hong Kong Stock Exchange.
The Chinese-led consortium was the sole bidder for the rail project after 16 other companies pulled out of the process, including Germany’s Siemens AG, France’s Alstom SA and Canada’s Bombardier Inc. Several said they pulled out after the government declined to give them more time to prepare bids.
Three days after the consortium won the bid, Mexico’s Ministry of Communications and Transportation said it would annul the deal because of public concerns about the bidding process.
Source: online.wsj.com


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