South Korea did not submit a bid for a multi-billion dollar high-speed rail project in Brazil, sources said Sunday, on concerns about its low profitability.
A South Korean consortium did not submit a preliminary bid for the auction for building a 511-kilometer train network between Sao Paulo and Rio de Janeiro, officials said. The deadline for the bid submission closes on Tuesday.
The consortium, led by state-run Korean Railroad Corp., affiliates of Hyundai Motor Co. and Samsung Group, opted out of the $24 billion project mainly because it seemed hard to make ends meet.
"It became impossible to submit a bid because we couldn't form a consortium with local partners in Brazil," said an official in the consortium.
"Because the Brazilian government allocated such a low budget, local builders didn't think the project would be profitable."
Forming a consortium jointly with Brazilian companies was one of the requirements laid out by the Brazilian government.
South Korea was seen as an active bidder among the international companies showing interests in the rail project, which also drew interest from Japan, France and Germany, according to Brazilian media.
Brazil, which will host the World Cup in 2014 and the Olympic Games in 2016, is expected to complete the high-speed railway in the next couple of years. (Yonhap News)