Business / Industries

Mexico to reveal rail bid winner in July

By Wang Jingjing (chinadaily.com.cn) Updated: 2015-01-27 15:14

After building bullet trains, light-rail vehicles and subway cars for the domestic market over the past decade, China's train makers and rail infrastructure companies have begun to work together in recent years to take advantage of the huge opportunities being offered globally.

Dong said although it is the second bid, the Chinese rail construction companies are attractive to the Mexican government and its business partners because unlike their competitors from Canada, Germany, South Korea and Japan, they can come with their own funding.

"They are capable of coordinating finance for projects through Chinese institutions such as the Export-Import Bank of China or China Development Bank," said Dong. "They also do not generally seek sovereign guarantees when working with local partners."

China is currently in talks with more than 20 countries such as Singapore, the United Kingdom, the United States, Russia and India on potential high-speed train projects.

So far it has secured three overseas deals, including the second phase of the Ankara-Istanbul high-speed rail line in Turkey, and parts of the Haramain high-speed rail project in Saudi Arabia.

Zhao Jian, a professor of rail transportation at Beijing Jiaotong University, said one significant factor in their favor is that Chinese rail infrastructure companies are currently more inclined to adopt a "build-transfer" business model to carry out projects in overseas markets, instead of using the "build-operate-transfer" model as they might have in the past.

Because the projects are being built on foreign soil, operating them may bring yet-unknown additional political, social or environment risks, said Zhao.

Under the present circumstances, Zhao suggested that this time, if it becomes a matter of who is paying for it, Mexico could use its mining resources to underwrite any loan needed.

 

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