CHINA: ‘The situation translates into a rare opportunity for rail’, said Deputy Minister of Railways Lu Dongfu on November 28, welcoming the news that the government plans to spend 700bn yuan on railway construction in 2009-10 in order to create or safeguard up to six million jobs. ‘Upgrading railway infrastructure would not only boost the industry, but also benefit the entire economy’, he explained.
We reported last month that the Chinese government was looking to bring forward railway investment as part of its 4bn yuan national economic stimulation package. Amongst the projects expected to benefit are two east-west corridors to accommodate increased traffic from the northern coalfields.
On November 25 the Xinjiang government confirmed that work would start in 2009 on a second railway through the northwest of the autonomous region, relieving the 1 892 km Lanzhou - Urumqi corridor at a cost of 120bn yuan. Partly running through Qinghai, the new line is being designed for passenger services, and will free up capacity on the existing route through Gansu for long-distance freight trains and coal traffic from the newly-discovered Shanshan coalfield in the Turpan basin.
Meanwhile, a 1 000 km line linking Tangshan in Hebei province with Erdos in Inner Mongolia is expected to handle up to 200 million tonnes of coal a year. Over the next five years more than 170bn yuan will go on new lines in the region, doubling the length of Inner Mongolia’s rail network from 6 800 to 13 000 route-km.
Lu was speaking at the formal launch of the Ministry of Railways’ updated medium and long-term railway development plan, which was signed off by the State Council on October 31. Confirming that the revised plan now envisages the CR network reaching 120 000 route-km by 2020, compared with 100 000 km in the earlier version, Lu said the length of passenger dedicated lines would be increased from 12 000 to 16 000 km. Total investment is put at 5 000bn yuan.
Amongst the extra projects in the plan, which do not form part of the economic stimulation package, are a route from Shenyang to Dandong in Liaoning province and a Zhengzhou - Luoyang line in Henan. ‘Rail transport has long lagged behind economic development’, admitted Lu, adding that the network would pass 79 000 route-km by the end of 2008 after more than 6 000 km had been built in the past five years.
As well as state funding, China is looking for outside finance to support some projects. On December 9 the Asian Development Bank confirmed that it was providing a US$150m loan over 26 years towards the 259 km Chongqing - Lichuan line in Hebei province. Although this line is intended to form part of the east-west corridor linking Shanghai, Wuhan and Chengdu as part of the government’s western expansion strategy, it is to be built and operated by a separate company able to set its own rates and outsource work to the private sector. The joint venture company is being established by the Ministry of Railways and Chongqing Municipality, which are contributing US$1 53bn to the project. A further US$1 38bn will come in loans from China Construction Bank. The line is to be electrified, and will be one of the first in China designed to accommodate double-stack container trains.
