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Old October 17th, 2014, 12:07 AM   #481
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Congrats to Mexico for starting to build the first dedicated HSR line in the Americas.
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Old October 17th, 2014, 01:48 AM   #482
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China submits only bid for Mexican HS project

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Evaluation of the proposal submitted by the consortium will begin immediately with the aim of concluding the deal by November 3. SCT says it expects construction to start in December and commercial services are due to begin operating in the second half of 2017.
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Old October 17th, 2014, 04:29 AM   #483
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What on earth is in that deal to leave everyone but the Chinese with cold feet
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Old October 17th, 2014, 05:25 AM   #484
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What on earth is in that deal to leave everyone but the Chinese with cold feet
The 1st High Speed Rail in the Americas and a new era of partnership between China and Mexico.
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Old October 17th, 2014, 05:59 AM   #485
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wow. That is huge news. 3.75 billion $ for 210km construction, rolling stock, signalling, and electromechanical works. I wonder how many train sets is planned to be ordered. Others couldn't even bid?!!? I am not that surprised though. It looks like it is priced really quiet competitive. Even if you think 3 billion of the budget is for the construction of the line, it is priced less than 15 million $/km!
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Old October 17th, 2014, 05:59 AM   #486
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The 1st High Speed Rail in the Americas and a new era of partnership between China and Mexico.
That's definitely /not/ the reason
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Old October 17th, 2014, 06:23 AM   #487
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Let me make a wild guess: low cost financing and lowball pricing in exchange for resources.
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Old October 17th, 2014, 06:55 AM   #488
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wow. That is huge news. 3.75 billion $ for 210km construction, rolling stock, signalling, and electromechanical works. I wonder how many train sets is planned to be ordered. Others couldn't even bid?!!? I am not that surprised though. It looks like it is priced really quiet competitive. Even if you think 3 billion of the budget is for the construction of the line, it is priced less than 15 million $/km!
12 trainsets
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Old October 17th, 2014, 07:51 AM   #489
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Let me make a wild guess: low cost financing and lowball pricing in exchange for resources.
I don't think so. Mexico is not Venezuela or Brazil. Commodities are not its primary export.

Mexico has been reluctant to large chinese investments, until now. We can't know for sure until november when mexican government will decide on the chinese proposal.
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Old October 17th, 2014, 10:13 AM   #490
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Quote:
Originally Posted by Sopomon View Post
What on earth is in that deal to leave everyone but the Chinese with cold feet
Yes, there's the prestige of building the first HSR of the Americas, (and the consequent stages if succesful) but there's also the fact that obviously the Chinese are extremely competitive on price.

But a big part of why I think they got cold feet was the perception of the massive financial support this has at the highest level from the Chinese. They wanted this bad. Chinese banks will give CRCC liquidity that the other companies would be hard pressed to match.

I also get the feeling, that there is the perception that on a political level, there was a lot of momentum building up between the Chinese and Mexico. Mexico has been a bit of a closed land for the Chinese due to the fact the Mexicans perceive the Chinese as their main competition. This project could conceivably kickstart the economic relationship between the 2. When you see that only some days after acceptance of the bid is announced, the President of Mexico travels to China...well, let's put 2 and 2 together.

It's a real shame that CAF couldn't present a bid. They had a nice train, good partners and a strong presence in Mexico.
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Old October 17th, 2014, 01:17 PM   #491
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If Mexico builds the first Latam HSR it will be a great achievement, and also a counterintuitive development. I always thought SP-Rio would be the first, as the case for HSR there is simply huge...
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Old October 17th, 2014, 01:36 PM   #492
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But a big part of why I think they got cold feet was the perception of the massive financial support this has at the highest level from the Chinese. They wanted this bad. Chinese banks will give CRCC liquidity that the other companies would be hard pressed to match.
.
So essentialy, you're saying that the others gave up as the Chinese bid seemed all but inevitable?
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Old October 17th, 2014, 04:06 PM   #493
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So essentialy, you're saying that the others gave up as the Chinese bid seemed all but inevitable?
Not inevitable, but certainly formidable. I think Elekto here once posted a link to a news story on how the head of Bombardier in Mexico had said that with the tiem they had for preparing a bid, it was "in chinese" to be able to win it.

I have no idea how expensive it is for a company to prepare a good bid, but I assume they must pick their battles. I think they should have joined forces and put a bid together. I just think that if the Mexican government accepts the chinese bid, CCRN will be very well positioned to win a lot more upcoming contracts in Mexico and the Americas as a whole. And that's not good for any of those companies (Bombardier, Alstom, CAF etc).
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Old October 17th, 2014, 04:54 PM   #494
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Not inevitable, but certainly formidable. I think Elekto here once posted a link to a news story on how the head of Bombardier in Mexico had said that with the time they had for preparing a bid, it was "in chinese" to be able to win it.
I think this is an essential point. When they tried to offer the prospective Brazilian HSL between Sao Paolo and Rio in bidding Bombardier, the Europeans and the Japanese were also moaning that they could not complete such a project from conception to operations in just four years. I don't know about Japan, but here in Europe these things take closer to 10 years. (And 20 in the U.K.... )

I wonder why our Latin American friends are in such a hurry? Do they perhaps require projects to be finished within the current presidential election cycle? I also wonder why our Chinese friends are so much faster than their competitors. Sloppy work or toil around the clock?
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Old October 17th, 2014, 05:07 PM   #495
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12 trainsets
Ok then, the construction will cost more like 3.5 billion which makes cost of each km around 16.5 million $. IMHO, This clearly shows China is not in Mexico for profits. They will either brake even or make a tiny amount of profit since even in China, the cost is about 20 million $. However this is for a line mostly on viaducts and 350km/h not 300km/h and I don't know how much of this Mexican line will be on viaducts. I assume both European and Japanese offer would have been double the Chinese one.
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Old October 17th, 2014, 05:14 PM   #496
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...................
I also wonder why our Chinese friends are so much faster than their competitors. Sloppy work or toil around the clock?
I believe, the scale they are building at "home" let them this. I bet they can provide a lot of machinery to Mexico which are already recuperate their cost from the build up in China.
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Old October 17th, 2014, 05:36 PM   #497
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Quote:
Originally Posted by hans280 View Post
I think this is an essential point. When they tried to offer the prospective Brazilian HSL between Sao Paolo and Rio in bidding Bombardier, the Europeans and the Japanese were also moaning that they could not complete such a project from conception to operations in just four years. I don't know about Japan, but here in Europe these things take closer to 10 years. (And 20 in the U.K.... )

I wonder why our Latin American friends are in such a hurry? Do they perhaps require projects to be finished within the current presidential election cycle? I also wonder why our Chinese friends are so much faster than their competitors. Sloppy work or toil around the clock?
the chinese have already the executive project done, they have been working on this since 2 years ago, because Mexico invited several firms since then, but the chinese took this seriously, the others not.

Mexico by its part, had already done feasibility studies since 2004 and updated them starting in 2012, so by the beginning of 2014 were done, plus all the railway rights were acquired by the middle of this year.
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Last edited by elekto; October 17th, 2014 at 05:43 PM.
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Old October 17th, 2014, 05:41 PM   #498
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Ok then, the construction will cost more like 3.5 billion which makes cost of each km around 16.5 million $. IMHO, This clearly shows China is not in Mexico for profits. They will either brake even or make a tiny amount of profit since even in China, the cost is about 20 million $. However this is for a line mostly on viaducts and 350km/h not 300km/h and I don't know how much of this Mexican line will be on viaducts. I assume both European and Japanese offer would have been double the Chinese one.
is cheaper in China because of the scale of production. 16.5 million/km is just my original assumption but I thought it was 18 until realized not to include trainsets etc..



certainly European or Japanese would be way more expensive, no option for Mexico.

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I believe, the scale they are building at "home" let them this. I bet they can provide a lot of machinery to Mexico which are already recuperate their cost from the build up in China.
the machinery is on board of the ships already
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Last edited by elekto; October 17th, 2014 at 05:48 PM.
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Old October 17th, 2014, 06:53 PM   #499
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Originally Posted by megaroad1 View Post
I have no idea how expensive it is for a company to prepare a good bid, but I assume they must pick their battles. I think they should have joined forces and put a bid together. I just think that if the Mexican government accepts the chinese bid, CCRN will be very well positioned to win a lot more upcoming contracts in Mexico and the Americas as a whole. And that's not good for any of those companies (Bombardier, Alstom, CAF etc).
There is no reason why all subsequent contracts have to go to the same company. Also I don't think it's in the power for those companies to keep Chinese competitors out of all export markets forever.

It seems to me as well that others concluded that Chinese winning this is inevitable so no point wasting effort to produce a losing bid.
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Old October 17th, 2014, 06:59 PM   #500
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certainly European or Japanese would be way more expensive, no option for Mexico.
Why do you keep saying that? It's just not true. In the table you yourself just posted the Spanish price is only marginally more than the Chinese one. Most likely the difference is merely more expensive labour costs.
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