The Ministry of Railways (MOR) announced on April 3 that the construction of the long-awaited high-speed rail link between Beijing and Shanghai will commence this year, and it will be operational in 2010. China Economic Weekly reported on April 23 that according to sources from the ministry, in this year alone, the first year of the 11th Five-Year Development Plan (2006-2010), the country will lay track for 13 new passenger services while continuing with the construction of 11 others.
Wang Qingyun, head of the National Development and Reform Commission's transportation department, said the Beijing-Shanghai rail project marked the beginning of a new era for China in the construction of railways on a grand scale.
In an interview with China Economic Weekly on March 30, MOR's spokesman Wang Yongping said that besides the Beijing-Shanghai link, work to build all the other passenger lines listed in the "Mid- and Long-term Plan for Railway Network" would be progressed in sequence.
"Of all the new lines the Beijing-Shanghai one is definitely the most costly and technically complex," he said. "Its success will be a strong support for the construction of other lines."
The plan Wang referred to was produced by MOR and approved by the State Council in January 2004. By 2020, according to it, four north-south and four east-west main passenger lines with a design speed of more than 200 km per hour will be built.
Track-laying has begun on the Shijiazhuang-Taiyuan, Wuhan-Guangzhou, Zhengzhou-Xi'an, Beijing-Tianjin, Guangzhou-Shenzhen-Hong Kong and Guangzhou-Zhuhai lines. Preparations are being made this year for the construction of the Beijing-Shanghai, Beijing-Shijiazhuang and Tianjin-Qinhuangdao routes.
For the first time "To speed up railway construction" has been written into the country's five-year plan. At the beginning of this year, Minister of Railways Liu Zhijun said at a national railway conference: "Railway construction will enter the most critical stage in the next five years. Both the scope of construction and investments are unparalleled in history."
According to sources from MOR's department of development and planning, the 11th Five-Year Plan provides a blueprint for China to start or renew more than 200 railway construction projects and lay nearly 20,000 kilometers of new track. That's almost three times the length of what was completed during the last five-year plan period.
In sharp contrast, before 1949, the total length of China's railway network was just 21,000 kilometers. The figure rose to 75,000 kilometers at the end of last year.
Of the new projects a total 9,800 kilometers on 28 passenger routes will be built and for 5,457 kilometers of that the design speed is more than 300 km an hour. On October 12, 2003, China's first special passenger line -- the 405-km Qinhuangdao-Shenyang Railway -- was completed, but so far it does not yet have lines permitting speeds of 300 km/h. Besides, only 30 percent or so of the existing railways are electric and have double tracks. The MOR plans to raise the rate to 45 percent by 2010 and 50 percent by 2020.
According to MOR's finance department 160 billion yuan (US$19.97 billion) will be invested in railway construction this year. Total railway investment will hit 1.25 trillion yuan (US$155.98 billion) in the new five-year plan period, registering a 357 percent increase over the five preceding years. And to achieve the goal of the "Mid- and Long-term Plan" an estimated 2 trillion yuan (US$249.57 billion) is needed.
However, there is still a huge budget shortfall. It seems that raising the money has become more critical than ever before.
The ministries of construction and railways jointly issued a notice on April 14 to continue opening markets for railway construction. Compared with a similar notice released last December, the open areas have been further expanded, including designing for railways at a speed of below 200 km/h and construction or construction supervision of large-scale railway stations.
For instance, to build the Beijing-Shanghai high-speed rail, both non-governmental capital and investments from overseas will be introduced.
"Non-governmental and foreign capital is welcome in railway construction markets," Wang Yongping said. "In principle passenger transport is accessible to private capital but it must remain state-owned. Freight transport may adopt the joint-stock system or even run under exclusive private ownership and management."
To further broaden investment channels, MOR is negotiating with almost all provinces, autonomous regions and municipalities directly under the central government, hoping to persuade them to participate in railway construction.
"We've been frequently disturbed by local protectionism when building railways," Wang said. "Should local governments help solve problems in terms of land acquisition and resettlement, the costs will be greatly reduced. It will be more helpful if they agree to provide funds."
In addition, both China Railway Express Co Ltd and Da-Qin (Datong-Qinhuangdao) Railway Co Ltd are planning their public listing as a new way to raise funds.
Bottleneck
Wang Yongping told China Economic Weekly: "Since China's reform and opening up, the national economy has been increasing at an average annual rate of 8 to 9 percent while the growth rate for railway construction is just 1.4 percent."
The existing railway situation has greatly hindered the growth of the economy, he stressed.
In terms of transport capacity it's said that a high-speed rail link is equal to five four-lane expressways. Railway is the first choice of the majority for traveling especially in a nation with a population of 1.3 billion. However, the irrational layout of the completed railway network has led to a difficult and tense situation between passenger use and freight transport.
Each year, during the 'golden weeks' of May Day, National Day and Spring Festival, it becomes extremely difficult for travelers to buy a train ticket. Things are even worse for freight transport.
According to Wang, at present, roughly 95 percent of freight transport by rail is for the country's priority materials like coal, grain, cotton, oil and chemical products with low freight charges and this has overloaded the railways. What's more, the current daily freight volume only makes up about 35 percent of demand, thus making it hard for many enterprises to be in normal operation.
Another odd thing, Wang pointed out, is that in many coal-mining areas people still have to rely on trucks fueled by expensive petrol to transport relatively cheap coal. "At any rate it's an unprofitable business," he said.
Modernized technology
When the construction of the Beijing-Shanghai high-speed rail link was put under an authorized plan in March, Liu Zhijun said the 1,307-km line would be fully based on China's own technology.
Since 2004 MOR has beefed up the independent research and development (R&D) of railway technologies. However, Ji Jialun, a professor from the School of Traffic and Transportation at Beijing Jiaotong University, suggested that independent R&D didn't conflict with introduction of foreign advanced technologies.
"Considering the shortage of qualified technical personnel, if we put unjustified emphasis on self-reliance it's possible that by the next century we're still lagging behind the developed countries and cannot change the situation in which rail transport is unable to meet actual needs," Ji warned.
Wang Yongping said technology introduction through open bidding should keep to the principle of 'inexpensive but of practical use'. "In line with the patterns of market activities we insist upon the complete transfer of key technologies," he stressed.
Restructuring
"New lines will largely be built in the next five years," Ji Jialun said. At the same time he predicted that by 2020 railway transport capacity would be able to meet the demand of economic and social development with the technical equipment to reach or approach the advanced level of other parts of the world.
"Railway modernization demands a modernized management system," he pointed out.
In an effort to increase efficiency, MOR announced on March 18, 2005 that it was dissolving all railway branch offices and reducing the original four-level administrative model (ministry-bureau-branch-station) into a three-level operation (ministry-bureau-station).
Since then a total of 41 branch offices have been closed; and as a result, nearly 50,000 people have been laid off. According to Wang Yongping, the majority of them are doing further training or waiting to be reemployed while some older workers retired ahead of time. "Overall it didn't cause any social problems," he said.
Besides, MOR launched a pilot project not long ago to streamline operations of some railway bureaus and reduce the number of employees. If successful, it could be used in all the 15 bureaus as well as the stations nationwide, Wang said.
(China.org.cn by Shao Da, April 30, 2006)