Introduction to the Railway Projects and Budget Cuts
The Mexican Secretaría de Infraestructura, Comunicaciones y Transportes (SICT) recently published international public bidding calls for the construction of the initial segments of the Saltillo-Nuevo Laredo and Querétaro-Irapuato railway lines. The budget for this year stands at 4,284 million pesos, which is a significant 63% reduction from the initial project proposals.
Budget Reductions and Advance Payments
According to the Agencia Reguladora del Transporte Ferroviario (ARTF), the advance payment to be given to winning companies will now be 20% instead of the previously planned 30% of the allocated budget for each fiscal year. The projects encompass project execution, construction, testing, and commissioning.
Saltillo-Nuevo Laredo Railway Project
For the Saltillo-Nuevo Laredo railway project, the initial budget for this year was 7,934 million pesos in the project proposal. However, the final budget is considerably lower at 2,908.7 million pesos, including VAT. The remaining funds for subsequent fiscal years will be subject to availability once the budget is approved.
Querétaro-Irapuato Railway Project
Similarly, the budget for the first segment (30.3 km) of the Querétaro-Irapuato railway project has been reduced from 3,567 million pesos to 1,376 million pesos.
Concerns from Interested Companies
In response to the bidding project proposals, companies like Construcciones Urales and Operadora CICSA expressed concerns regarding the tight deadlines.
Construcciones Urales stated: “Given the magnitude of the work and the need for complementary engineering tasks based on the basic engineering provided, we request a longer period for submitting our bids, ideally 10 weeks from the publication of the Saltillo-Nuevo Laredo project call.”
Operadora CICSA mentioned: “Considering the high risk for contractors in this project, we suggest extending the time to thoroughly analyze the basic engineering documentation provided.”
Both companies were informed that their requests were not valid and that the established schedule should be adhered to. The deadline for submitting technical and economic proposals is July 8 and July 7, respectively. Work commencement dates are set for July 31 (Saltillo-Nuevo Laredo) and July 30 (Querétaro-Irapuato), with execution periods of 960 and 671 days, respectively. Given the volume of information to be analyzed, it is anticipated that multiple construction firms will request extended deadlines for submitting appropriate bids, benefiting the development of these railway projects.
Key Questions and Answers
- What is the main reason for the budget cuts in these railway projects? The primary cause of the 63% budget reduction is a decision by the SICT to allocate fewer funds for the construction of the Saltillo-Nuevo Laredo and Querétaro-Irapuato railway lines.
- What does the reduced budget mean for the projects? The lower budget implies that the scope and scale of these railway projects may be adjusted, potentially affecting factors such as materials used, construction timelines, and overall project completion.
- Why are companies concerned about the tight deadlines? Companies like Construcciones Urales and Operadora CICSA have expressed concerns about the limited time to analyze engineering documentation, assess risks, and prepare comprehensive bids for these significant infrastructure projects.
- What is the significance of the ARTF’s decision to reduce advance payments? By decreasing the advance payment from 30% to 20% of the allocated budget, the ARTF aims to balance financial risks for contractors while ensuring project progress.
