BUSINESS

Mexico Is Going To Have High-Speed Rail Before Canada, And Bombardier May Build It

11/07/2014 02:45 EST | Updated 01/07/2015 05:59 EST
ChinaFotoPress via Getty Images
SHENYANG, CHINA - JUNE 27: (CHINA OUT) CRH380B trains, which will service the Harbin-Dalian high-speed railway, are seen on June 27, 2012 in Shenyang, China. The 904-km-long Harbin-Dalian line, which links three provinces in northeast China, is the first high-speed railway in the region, expected to start service in July. (Photo by ChinaFotoPress/ChinaFotoPress via Getty Images)
MONTREAL - Mexico has cancelled a high-speed rail contract granted earlier this week to a Chinese-led consortium, opening the door for a possible bid from Bombardier, the Canadian transportation company said Friday.

"I can't tell you a definite yes but obviously we will be interested. We will be looking into that bid once more," spokesman Marc Laforge said in an interview.

He said the company didn't submit a bid last time because the request for an extension from several companies was not granted.

Mexico's first high-speed train is intended to travel 210 kilometres between Mexico City and the central city of Queretaro, where Bombardier Aerospace has a large manufacturing presence.

The Chinese group comprised of China Railway and CSR was the only bidder on the project.

A statement from President Enrique Pena Nieto's office said the process will be reopened to give others a chance to submit bids. It says the decision to extend bidding, reportedly for six months, was made for reasons of transparency.

The manner in which the US$3.7-billion project was awarded has been criticized by some opposition lawmakers.

Bombardier Transportation has had active in Mexico for 22 years and sees good opportunities as the country modernizes its infrastructure.

Laforge said the Chinese would likely offer stiff competition in another round of bidding given its low-cost operations. "They are part of the competition and it's up to us to adapt," he said.

Walter Spracklin of RBC Capital Markets said the new bid could also attract interest from Germany's Siemens and Alstom of France.

"While the Chinese-led consortium will likely remain very competitive in any rebid process, we believe Bombardier will have a real opportunity to win the contract," he wrote in a report.

A visit earlier this year to Bombardier's Mexican rolling stock manufacturing facilities left the analyst believing the company was well positioned to win the majority of nearly US$8 billion of contracts in the country.

About 70 per cent of Mexico's trains have been supplied by Bombardier and it is the only major manufacturer in the region with regional design, manufacturing and service operations, Spracklin said.

— With files from The Associated Press

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