The suspension of Mexico’s US$3.75 billion high-speed railway project is not indefinite but just a “temporary and domestic” measure, the country’s top diplomat in Hong Kong told EJ Insight in an interview.
The move is part of preventive steps taken in an uneasy international economic environment, Consul General Alicia Buenrostro Massieu said Thursday.
She said she is pretty sure the project will be put back on line at the proper time and that Chinese firms would be welcome to submit bids.
Buenrostro Massieu was speaking after signing a memorandum of understanding (MOU) on cooperation between Hong Kong and Mexico in intellectual property (IP).
The planned railway is expected to link Mexico City and the growing industrial hub of Querétaro.
The contract was initially awarded in November to the only bidder — a consortium led by China Railway Construction Corp. (CRCC). However, the deal was soon cancelled, after other companies complained they had not been given enough time to prepare.
The Mexican diplomat denied the project is “indefinitely suspended”, as media quoted the country’s budget minister, Luis Videgaray, as saying at the news conference to announce a US$8.3 billion cut in the 2015 budget on Jan. 30.
“[The high-speed train project] is not cancelled,” Buenrostro Massieu said.
“Infrastructure is important for us, and China is a very important partner.”
She said China is very competitive in terms of technology and cost.
Shares of CRCC fell sharply after the “indefinite suspension” was announced.
China’s National Development and Reform Commission said Monday it regretted the suspension and urged the Mexican government to ensure the legitimate rights and interests of Chinese companies.
“Mexico is to US as Hong Kong is to China”
Buenrostro Massieu said the embarrassment over the suspension of the high-speed rail project will not affect Mexico’s efforts to build a closer relationship with China, and Hong Kong will play a key role in helping it achieve that goal.
The MOU on IP cooperation signed Thursday is an important step, among other initiatives, toward a stronger diplomatic and economic relationship between Hong Kong and Mexico, she said.
The document provides a framework to facilitate the sharing of best practices and technical information, training for business communities, promotion of IP trading and commercialization and joint organization of seminars and conferences.
The consul general said Mexico is to the United States as Hong Kong is to China, since her country’s long border with the US makes it a good gateway to the US market.
Many manufacturers ship intermediate products to Mexico, further process them, then sell the finished products to the US, she said.
Buenrostro Massieu said the Mexican government has been trying to persuade Hong Kong manufacturers with facilities in mainland China to move to Mexico.
She cited as Mexico’s advantages (1) an ideal location to approach the whole American continent, especially the US; (2) a strong manufacturing sector that benefits from the North American Free Trade Agreement, which allows foreign investors in the manufacturing sector to enjoy lower import duties and export duty-free to the US market; and (3) a favorable demographic structure with an average age of about 27.
On the other side, Mexican financial institutions are being encouraged to set up branches in Hong Kong so that firms can pay for trade between the two countries directly in renminbi.
Banco Interacciones will send staff to Hong Kong this autumn to evaluate the feasibility of doing so, Buenrostro Massieu said, and Banco Monex and Banorte are also exploring the possibility.
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