China’s construction of a vast high-speed rail network will bequeath it one of the world’s most advanced rail industries, but it needs to monitor the debts it is running up in the process, according to the World Bank
China plans to build 13,000km (8,078 miles) of high-speed rail lines by 2012, more than the rest of the world combined. The Beijing-Shanghai line due to open next year will halve the travel time between the two cities to five hours.
Trains will travel at a maximum speed of 350km an hour on 8,000km of newly built lines and 250km an hour on 5,000km of upgraded track.
By 2020 the network will have expanded to serve more than 90 percent of the population, at a budgeted cost of 2 trillion yuan ($295bn), and include 16,000km of the fastest newly built lines, according to the government’s blueprint.
Li Jun, a senior railway ministry official, told reporters the target for new tracks was likely to rise as the government draws up a more detailed economic plan for the next five years.
The aim is to ensure most provincial capitals – apart from those offshore and furthest west – are no more than an eight hour journey from Beijing, boosting efforts to bring growth and urbanisation to poorer interior areas.
Places covered include far-flung southwestern Kunming, the capital of Yunnan province, some 2,000 km from the capital.
Costs are high
China is building a fleet of state-of-the-art trains for the network with the help of foreign firms including Bombardier Inc, Siemens, Kawasaki Heavy Industries Ltd and Alstom SA.
“This transfer of technology and know-how, together with the experience of building and operating several thousand route-kilometres of high-speed railway, will make China’s one of the most advanced railway industries in the world,” the World Bank said in a report.
“This should position the country to compete internationally when other countries adopt high-speed railways,” the report said, likening the creation of the network to the building of the Interstate highway system, which knitted the US together half a century ago.
But foreign firms hoping for a long-term bonanza are likely to be disappointed, with Beijing keen to focus on using imported designs and skills to complement domestic technology.
“We are targetting the most advanced high-speed rail technologies in the world, with innovation as the backbone,” the railway ministry’s chief engineer, He Huawu, said in notes prepared for a news conference in Beijing.
“On the foundation of imported technologies, a dedicated high-speed rail technology innovation platform has been established, so that China’s railway industry will be able to fully rely on its original innovation in the future,” he said.
He denied, however, that foreign companies were being forced to hand over their technology as the price of market access.
The breakneck expansion will create hundreds of thousands of jobs – for skilled engineers as well as manual labourers – and, apart from shortening passenger travel times, will release much-needed capacity for growing freight traffic, the bank said.
Looking at the lessons to be learned, it said the high population density of eastern China, fast-growing incomes and the prevalence of many big cities fairly close to one another created favourable conditions not found in most developing countries.
Nor could all countries make the vast political and economic commitment that a decades-long programme requires.
And then there are the financial costs.
“Even in China, the sustainability of railway debt arising from the programme as it proceeds will need to be closely monitored and payback periods will not be short, as they cannot be for such ‘lumpy’ and long-lived assets,” the report said.
“Governments contemplating the benefits of a new high-speed railway, whether procured by public or private or combined public-private project structures, should also contemplate the near-certainty of copious and continuing budget support for the debt,” it added.
