Mexico denies favoring Chinese consortium in railway bidding

MEXICO CITY (Reuters) - Mexico’s Foreign Ministry denied allegations that a Chinese consortium had been given an inside track in bidding for a lucrative contract to build a high-speed train system.

Mexican news outlet Aristegui Noticias reported on Tuesday that officials gave Chinese representatives 11 months' notice about a contract to build a train project linking Mexico City with the wealthy, industrial city of Queretaro, citing a letter from China Railway Construction Corporation (CRCC) 601186.SS.

The report details a 2014 meeting between Foreign Minister Luis Videgaray, who was then finance minister, and Chinese officials to discuss cooperation between the countries, which took place 10 days before the international tender launched.

In a statement issued on Wednesday, the Foreign Ministry stressed the meeting between Videgaray and Chinese officials was publicized and touched on a wide range of projects, including the Mexico-Queretaro railway, which was already public.

“At all times, it was made clear to Chinese officials that the projects would be realized through public tenders,” the ministry said, adding that efforts to promote ties between the countries via a working group were “announced in an open and transparent fashion.”

However, questions were raised after 16 firms - including Siemens SIEGn.DE, Bombardier BBDb.TO and Mitsubishi 8058.T - withdrew from the rail tender, leaving a consortium led by state-controlled CRCC as the de facto winner, Reuters reported.

Around that time, it also emerged that Mexican President Enrique Pena Nieto’s wife was buying a home from a Mexican firm that was part of the Chinese-led consortium, touching off a political firestorm.

Videgaray’s participation in the working group was not mentioned in a Mexican government auditor’s report, which found that Videgaray and Pena Nieto had not benefited or tried to influence officials responsible for awarding contracts, according to Aristegui Noticias.

The group in which Videgaray participated has yielded other successful collaborations between the nations, such as a Mexico-China investment fund, the foreign ministry said.

Reporting by Julia Love; additional reporting by Daina Beth Solomon; Editing by Himani Sarkar