China Eximbank offers $3.23 billion loan for Mexico City–Querétaro High-Speed Railway Construction Project

In 2014, the China Eximbank agreed — at least in principle — to provide a loan worth $3,230,000,000 for the Mexico City–Querétaro High-Speed Railway Construction Project. The proceeds of the loan were to be used to finance 85% of the $3.8 billion cost of the project, which would have involved the construction of a 210 km high-speed train from Mexico City to Querétaro. The China Eximbank loan that was offered carried the following borrowing terms: a maturity of 20 years, a grace period of 2.5 years and a fixed interest rate of 3.22 percent. In early November 2014, a consortium called ‘Railway Construction Corporation’ — consisting of China Railway Construction Corporation, CSR, GIA, Prodemex, Teya, GHP infrastructure Mexicana and Systra — was awarded a government contract (concession) worth 50.8 billions for the project. However, Secretaría de Comunicaciones y Transporte (SCT) and the President of Mexico, Enrique Peña Nieto, revoked the bidding process on November 6, 2014 after evidence was found and broadcast that corrupt acts led to Railway Construction Corporation being selected as a winner. One of these corrupt acts was the consortium giving a $7 million house, located in a highly exclusive zone in Mexico City, as a present to the president's wife). In mid-January 2015, Mexico re-opened the bidding process. Two weeks later, the Secretariat of Finance and Public Credit announced the ‘indefinite suspension’ of the project as a result of budget cuts in 2015 and financing problems, which was partially the result of the international decline of oil prices. Prior to its suspension, the 210-kilometer railway had received all the required environmental permits and was to function for at least thirty years; ten municipalities were to be affected by the construction in three Mexican states (México, Hidalgo, and Querétaro). The project was projected to be completed in five years, generating more than 20,000 direct jobs and an additional 40,000 indirect jobs, first in a construction stage and then due to substantial positive environmental effects (Cámara de Diputados 2015, 11). The train would have transported up to 426 passengers in eight wagons with a daily capacity of transporting up to 29,000 passengers; the average speed of the journey would have been 180 kilometers per hour, reaching speeds of up to 300 kilometers per hour.

Additional details

According to Mexico News Daily, the suspended Mexico-Queretaro train project has been put back on government's agenda in 2018.

Number of official sources

4

Number of total sources

9