Mexico agency issues advice for fair high-speed rail tender

Mexico's antitrust watchdog said over the weekend that the government should change various aspects of a new tender to build a high-speed train system after a scandal with a previous contract.

In early November 2014, China Railway Construction Corp (CRCC) and a group of Mexican partners won the tender to build the $3.75 billion rail line, but the contract was revoked and one of CRCC's Mexican partners sparked a conflict-of-interest scandal.

On January 14, authorities revealed fresh preliminary bid terms for the train project linking Mexico City with the wealthy industrial city of Queretaro.

Mexico's Federal Competition Commission issued a series of recommendations to change those bid terms.

"The inclusion of a multitude of technical and economic elements could provide an advantage to some participants," the commission wrote.

Commissioners highlighted technical requirements such as that the winning bidder must have built at least 300 kilometers of high-speed train tracks.

The commission did not specify any companies by name. Commission representatives were not immediately available to clarify if authorities were required to heed its recommendations or if they were only non-binding guidelines.

Sources with knowledge of the bidding have told Reuters that CRCC looks poised to clinch the new contract given its broad financing plan, its cheap high-speed technology and political support in Mexico.

Since taking office in 2012, Mexican President Enrique Pena Nieto has welcomed China's investment in Mexico.

But controversy exploded when it surfaced that Grupo Teya, one of the Mexican firms in the CRCC-led consortium, was a subsidiary of a government contractor that owned a multimillion-dollar home Pena Nieto's wife was in the process of buying.

The government revoked the contract on November 6, a few days before the Teya revelations were published.

Companies now have six months to prepare their bids for a July 14 deadline.