Why China's CRRC was excluded from a US$1.9bn Maya train tender

Restrictions in a 40bn-peso (US$1.9bn) rolling stock supply tender for Mexico’s Maya train could have prevented Chinese state-owned locomotive manufacturer CRRC from having its bid accepted, an expert told BNamericas.

The firm had shown interest in the tender and country manager Jao Feng even sent President Andrés Manuel López Obrador (AMLO) a letter asking for a level-playing field for all companies, without providing details.

Neither CRRC nor tourism board Fonatur, which oversees the tender, were available for comment.

But Enrique Dussel Peters, an expert on Chinese investments in Mexico and head of Chinese-Mexican think tank Cechimex, told BNamericas that “I can assume that CRRC sought to participate in the tender and submitted a project that was not included or was not accepted in the presentation of proposals.” 

Dussel Peters said the procurement documents, which were modified several times since tender launch, contained a clause that could have restricted Chinese participation. According to a clause “a bidder of foreign nationality may participate if their country of origin grants reciprocal treatment to bidders of Mexican nationality.”

But Dussel Peters said “I am afraid that there is no such reciprocity. In other words, if Mexican companies wanted to participate in bidding processes in China, the same conditions do not exist.”  

The expert added Feng likely referred to this clause in his letter.

The letter to AMLO

Feng sent the letter to AMLO on April 26, less than two weeks before the presentation of proposals. But the president’s office received it only on May 5, and it leaked to the press last weekend. 

In the letter, Feng highlighted CRRC’s international business and its 32.3bn-peso contract to modernize Mexico City’s metro line No. 1, which it won in a joint venture with China Communications Construction Company (CCCC) in November. 

He also wrote that “we want Mexico to be our manufacturing headquarters in Latin America.”

Feng added, “in this process, we would like to ask you not to restrict participation to companies from different countries, and that the tender allows competition under the same qualification and evaluation conditions for all competitors.”

Dussel Peters said that CRRC’s plans to open a locomotive plant in Mexico are now uncertain. 

Tender timeline

Fonatur announced the tender in November. It entails the acquisition and testing of 43 trains; signaling, safety and telecommunications systems; the design, construction and equipping of workshops; and a five-year maintenance plan. 

The 1,500km Maya train will connect five states in the southeast, and three of its seven stretches will be fully electric while it will run on diesel and electric power on the other stretches. 

In the past six months, players such as France’s Alstom, Spain’s CAF and CRRC have participated by asking Fonatur technical questions. Two months ago, Fonatur rejected a request to further delay the presentation of proposals due on May 7. 

But only the offers from a consortium led by CAF’s local subsidiary and by a consortium led by Alstom’s local unit were published last week. 

With 31.5bn pesos, excluding taxes, the Alstom consortium, comprising Bombardier, GAMI Ingenieria e Instalaciones and Construcciones Urales, submitted the lower bid. 

The CAF consortium, including Rubau México, is offering 32.2bn pesos without taxes. 

Fonatur will announce the winner on May 26.

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