Mexico will cut government spending by $8.4 billion this year because of a drop in revenues due to declining oil prices.

Finance Minister Luis Videgaray also said Friday the government will put on hold plans to build a high-speed rail project that has been marred by allegations of favoritism.

Mexico has seen prices for its oil fall in recent months from around $100 to $38.42 per barrel. The government relies on oil revenues for about a third of its budget.

A Mexican firm allied with Chinese companies won the high-speed rail project in November. But the contract award was cancelled just before local media revealed the Mexican firm built a mansion for First Lady Angelica Rivera.

Another train project in the Yucatan peninsula has been cancelled.