Mexico's $5 bln Punta Colonet port project in doubt

MEXICO CITY Jan 13 (Reuters) - Mexico is looking into whether a $5 billion project to build a Pacific coast container port is viable because of slumping shipping traffic and scarce credit, the government said on Tuesday.

The port, planned for Punta Colonet on the Baja California peninsula near the U.S. border, would handle up to 6 million containers per year and has been a highlight of President Felipe Calderon's national infrastructure development plan.

But Pacific port traffic in the United States and Canada, pushed to capacity in recent years by explosive growth in trade with China, has slumped 30 percent in recent months, Communications and Transport Minister Luis Tellez told reporters.

The global credit debacle has made it much more difficult to find funding, forcing the government to postpone tenders to develop Punta Colonet, Tellez said.

"Given Colonet's size, we're looking at whether there's financial capacity to do it," Tellez said.

Citigroup (C.N) is investigating alternatives for eventually financing the project and is expected to report to the government later in January, he said. (Reporting by Noel Randewich; Editing by Gary Hill)