China’s CRRC confirms plans to install locomotive plant in Mexico

Chinese state-owned locomotive manufacturer CRRC has confirmed plans of establishing its Latin American headquarters in Mexico.

The decision comes despite the company being unable to bid in a 40bn-peso (US$1.98bn) rolling stock supply tender for the Maya train.

"We intend to set up a 100-hectare plant generating more than 5,000 jobs … There are several projects in which we are already participating and we have every intention of supporting Mexico," CRRC’s Mexican spokesperson, Íñigo Pérez Gallego, told local business publication Expansión. 

Although the plant’s location is still to be determined, Pérez said it could be in Veracruz state or the coastal city of Tampico in Tamaulipas state, where the firm already owns some land.

CRRC’s plans for Mexico were originally unveiled in a letter addressed to President Andrés Manuel López Obrador (AMLO) on April 26.

Given that the railway firm’s offer did not appear in the presentation of proposals for the rolling stock contest on May 7, it was uncertain whether it would move forward with its plans. CRRC did however already win a major railway tender in November, when the Mexico City government awarded it a 32.3bn-peso contract to modernize the capital’s metro line No. 1.

The latest version of the rolling stock tender, which was modified several times after its launch in November, 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. 

In the letter, CRRC country manager Jao Feng told AMLO that the company was very interested in the tender, but that it could not submit a bid because there was not a level-playing field for all companies. 

Feng argued that the tender terms benefited other bidders such as France’s Alstom and Spain’s CAF - both with assembly plants in Mexico. 

The tender stipulated that 65% of the equipment manufactured for the Maya train must be assembled in Mexico. 

Without success, CRRC asked the authorities to lower the requirement to 35%. 

Only two proposals were submitted on May 7, one from a consortium led by Alstom and the other one from a consortium led by CAF. 

The country’s tourism board (Fonatur) will unveil the winner on May 26.