Spain's Iberdrola suspends construction of Mexican plant -local media

MEXICO CITY, June 24 (Reuters) - Spanish power generation company Iberdrola has suspended the construction of a plant in Mexico after failing to reach a contract to supply power to the state power company, CFE, a local official said on Wednesday.

The mayor of Tuxpan, the city where the plant was to be constructed, told local media that the company had already invested about $40 million in the project and that the land, permits and other logistics were in place to begin construction.

“They did not start because they did not have this important signature (from CFE), because they feared that in the end they would be left as a white elephant,” the mayor, Antonio Aguilar, told local radio station MVS Radio.

“It is very unfortunate,” Aguilar added, saying the company informed him of its decision.

Iberdrola and CFE did not respond to requests for comment.

The planned investment in the eastern port city of Tuxpan, in Veracruz state, totaled $1.2 billion, according to local media reports.

Veracruz Governor Cuitlahuac Garcia wrote in a post on Twitter that the project had not been canceled, but its construction will be put up for tender by the CFE.

“I contacted our friend Rocio Nahle, Secretary of Energy, and she has confirmed that the project for Tuxpan will continue, but that it belongs to @CFEmx and the state company will tender its construction,” Garcia wrote.

Last week, Mexican President Andres Manuel Lopez Obrador accused Iberdrola of mounting a media campaign against his government as well as unspecified acts of graft.

A representative for Iberdrola in Mexico said the company had no comment on the matter. (Reporting by Noe Torres and Adriana Barrera; Editing by Leslie Adler)