Mexico’s President Enrique Peña Nieto has cancelled a lucrative, $3.6 billion contract his country signed with a group of Chinese firms to build a high speed rail system between Mexico City and the industrial hub of Querétaro. The move came as a concession to public perceptions of corruption related to the deal, which was signed so soon after being proposed that alternative firms didn’t have the time to enter bids for the project. The FT reports:
Gerardo Ruíz Esparza, Mexico’s transport secretary, said the contract had been cancelled to ensure “absolute clarity, legitimacy and transparency”. […]
[I]t would have been China’s first overseas high-speed rail project and could have potentially set a precedent for further deals, including a California tender to link San Francisco with Los Angeles.
This is a big loss for China. One of the reasons that it invested so much in its own high speed rail system was so that it could market its technology, as well as other infrastructure development projects, abroad. But as this story shows us, Chinese companies may have to change their ways of doing business to land big contracts in the OECD world. In today’s world, corruption isn’t just a domestic issue.