RMB2 trillion needed for railways

[photopress:bombadier.jpg,full,alignright]It seems that almost every season China raises the speed of its trains. It has now just done this for the sixth time. This is not a cheap hobby. To do it China made RMB29.6 billion investment.

According to China’s Mid- and Long-term Railway Development Plan, by 2020 the total mileage of China’s railway system will reach 100,000 kilometers. This means that RMB2 trillion of construction capital will be needed.

In the 13 years to come, China will need RMB153.8 billion of financing every year in railway construction. This is thought to be a lucrative market that will attract many foreign companies.

To put this into perspective Bombardier Transportation, the world’s No 1 maker of trains headquartered in Canada, recently said that they regarded China as their long-term strategic partner. Early in 2004, Bombardier Transportation signed a strategic partnership agreement with Chinese Ministry of Railways and the company had made a long-term development plan for China.

Earlier this year the Ministry of Railways signed a purchase agreement for 500 large-power electric locomotives with Dalian Locomotive and Rolling Stock that used Bombardier’s technologies. The agreement involved a total capital of RMB11.3 billion.

This year, China plans to put RMB256 billion into railway construction and Chinese railway departments intend to do it with foreign funds. The government intends to diversify investment sources for railway construction. Railway departments are making efforts to introduce more strategic investors and change some transportation companies into stock companies.
Source: China.com