Mexico pays Chinese firm $1.3m more for cancelled rail project

Mexico will compensate China Railway Construction Corporation (CRCC) a further $1.31m for cancelling a $3.75bn high-speed rail contract.

CRCC was at the head of a consortium that won the project last year, but the contract was cancelled in November just days after being awarded.

Mexico had already paid CRCC $16m in compensation, but the firm reserved the right to demand more. Controversy surrounded the contract award as the CRCC-led consortium was the only bidder.

The Mexican government relaunched the bid earlier this year, but that was cancelled for a second time as low oil prices strained the country’s finances.

The Chinese rail firm gave Mexico’s communications and transport ministry (SCT) a list of costs that it had incurred during the bidding process and had requested for compensation.

Source: BBC

Photograph: A retired locomotive at the National Museum of Mexican Railroads (Hernán García Crespo/Wikimedia Commons)

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