February 3, 2015 / 2:18 AM / 4 years ago

UPDATE 1-China to seek compensation for scrapped $3.75 bln Mexico railway deal

* CRCC says plans to seek compensation

* Second time Mexico shelved project

* Contract would have been biggest overseas construction deal for Chinese firm (Updates with CRCC statement)

SHANGHAI, Feb 3 (Reuters) - State-backed China Railway Construction Corp (CRCC) said it plans to seek compensation from the government of Mexico after it scrapped a $3.75 billion high-speed rail project the company was bidding for.

The company did not say how much it was seeking, but this is the second time Mexico has shelved the project. A consortium led by CRCC had been the only bidder for an earlier tender, but Mexico cancelled it late last year due to conflict-of-interest concerns about a local company.

Mexico relaunched the tender last month, and sources had told Reuters that CRCC was poised to clinch the deal. The government, however, said on Saturday it had scrapped the project altogether due to budget cuts.

The Chinese government has been working hard to export its high-speed technology abroad after building the world’s longest rail network in a decade. The Mexican contract would have been the largest single overseas construction deal won by a Chinese firm.

CRCC said late on Monday the project was a “single special case” whose suspension would not impact its overseas activities.

The National Development and Reform Commission, China’s top economic planning agency, in a separate statement, also urged Mexico to “properly deal with the huge manpower and money Chinese enterprises invested in the project bid”. (Reporting by Brenda Goh; Editing by Stephen Coates and Miral Fahmy)

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