China's inter-city rail projects cleared

By Liu Yiyu (China Daily)
Updated: 2010-08-14 10:29
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Beijing - The National Development and Reform Commission (NDRC) on Friday approved a batch of inter-city rail transit networks, spanning more than 2,000 kilometers, to accelerate regional integration.

The nation's economic planner said on its website that it has cleared the plan to build the network across central China, mainly in Henan province. The network is expected to link nine cities and has an total length of 496 kms.

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It also includes amendments on plans of the networks across the Pearl River Delta region, with a length of 1,478 kms, as well as metro lines in Xi'an, the capital city of Northwest China's Shaanxi province.

"The plans are a continuation of China's supportive policy on infrastructure construction," said Ou Guoli, a professor at the business and management department of the Beijng Jiaotong University.

"It will create huge investment opportunities and benefit industries like steel, cement and telecommunications," Ou said.

According to Ou, the average cost of a railway transit system ranges from 100 million yuan to 200 million yuan per km.

The cost is even higher for metro lines, with an average cost of 600 million yuan per km.

China's urbanization has come to a certain stage when there are more and more requirements on transportation efficiency, indicating a speed-up in the country's rail transit system, Ou said.

China has launched 31 metro lines in 10 cities. The State Council last year approved 79 additional metro lines in 22 cities, at an estimated investment cost of around 882 billion yuan. That in turn is expected to create huge demand for rail-related businesses, particularly, for train makers.

China CSR, one of the two largest train makers in China, has teamed up with the Henan and Guangdong provinces to cash on the booming city rail transit system.

"Two years back, we had an annual production capacity of 2,000 units. It still lags behind (the booming demand)," Zhao Xiaogang, chairman of China CSR, told Forbes China magazine in a recent interview.

The Chinese company plans to ramp up annual production capacity to 3,000 units this year.

French train maker Alstom has sold more than 1,200 trains to Shanghai Metro and over 400 in Nanjing. It also provides metro signaling systems for Beijing, Guangzhou and Shenzhen. Alstom said it is now looking for opportunities in the second-tier cities.