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Compensation for Mexico rail line still under negotiation: CRCC

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2016-05-25 08:40Global Times Editor: Li Yan

Canceled project 'won't have broader implications' for sector

China Railway Construction Corp (CRCC) on Tuesday denied media reports saying the Mexican government plans to offer the company 8.1 million yuan ($1.24 million) for canceling a high-speed rail contract.

The reports are "not correct," Yu Xingxi, board secretary of CRCC, told the Global Times on Tuesday. "Both sides are still negotiating the amount of the compensation."

Yu didn't reveal more details.

The Embassy of Mexico in Beijing couldn't be reached for comment on Tuesday.

Mexico plans to compensate CRCC 8.1 million yuan for canceling a high-speed rail contract, Chinese financial publication Caixin reported on Tuesday.

A Chinese-led consortium, which included CRCC, entered the only bid to build a high-speed railway in Mexico in November 2014.

The Mexican government announced on January 31, 2015 that it would suspend the project because of fiscal constraints, according to the Xinhua News Agency in February 2015.

CRCC filed for compensation in February 2015, said Xinhua.

It's hard to say why the two parties haven't reached an agreement on the amount of compensation, Luo Renjian, chief research fellow at the Institute of Comprehensive Transportation under the National Development and Reform Commission, told the Global Times on Tuesday.

Luo noted that the case won't have broader implications.

Wang Mengshu, a railway expert at the Chinese Academy of Engineering, agreed.

"The case won't have too much impact on Chinese high-speed trains' overseas expansion," Wang said.

China has been making efforts to expand its railway business overseas, Wang told the Global Times on Tuesday.

"It's a good start to build ordinary railways. Then, China will have more opportunities to talk to other countries about building high-speed railways," noted Wang.

For instance, Ethiopia inaugurated the electrified Addis Ababa Light Rail Transit system in September 2015, which is the first light railway in Africa. The system has two lines with a total length of 34 kilometers, Xinhua reported in September 2015. The project was built by the China Railway Group in the capital of the African country, according to Xinhua.

Premier Li Keqiang has made many efforts during foreign trips to highlight China's high-speed rail technology, saying such lines will be cost-effective projects, Xin-hua reported in September 2015.

China will make more efforts to enhance its international competitiveness in 2016 and win several overseas projects, such as a high-speed rail link from Moscow to Kazan in Russia and the US Xpress West high-speed railway project connecting Las Vegas and Los Angeles, according to a report by news portal people.com.cn in January this year.

Chinese railways have advanced technology and industrial standards, which should give Chinese railway companies the confidence to expand overseas, said Wang.

However, those companies also need to be aware of political factors when they go abroad, said Luo, noting that it's better to carry out complete research of targeted countries before making any move.

Overseas projects under construction include railways linking China and Laos, China and Thailand, as well as Hungary and Serbia. There's also a project that will run between the capital Jakarta and Indonesia's fourth-largest city Bandung.

  

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