Chinese state-owned contractor China Railway Construction has been awarded contracts worth a total of CNY 13.4 billion (US$ 2.2 billion) for railway electrification, railway construction and road building projects in China.

The company won a contract to construct a 53 km section of the planned 362 km high-speed rail line connecting the cities of Zhengzhou in Henan province, north-central China, and Xuzhou in Jiangsu to the north-east of the country, with a bid of CNY 3.6 billion (US$ 572 million). The Zhengzhou to Xuzhou rail line is scheduled for completion by the end of 2016.

It also won another bid to install electrification systems for a section of Lanxin Railway in north-western China – a CNY 5.2 billion (US$ 835 million) contract that also included the reconstruction of Xining railway station in Qinghia province, and the construction of a second double line of rail track at Lanzhou pivot railway hub in Gansy Provice, north-west China.

In the roads sector, China Railway won a CNY 2.3 billion (US$ 369 million) contract for the construction of section B of the Maliuwan-Zhaotong section of Chongqing–Kunming Highway in Yunnan province as well as separate contract worth CNY 2.5 billion (US$ 402 million) for the construction of section C of the Maliuwan-Zhaotong Section of Chongqing–Kunming Highway .

IN 1996 China's first rail outlet to the west opened - a single line from Urumqi through the Pass of Druzba to Aktogay in Kazakhstan. This line was quickly double-tracked and further capacity has just been created with the opening in December 2012 of the Zhetygen - Korgas - Jinghe line. Plans are now under development to add further routes through Kyrgyzstan (IRJ January p8) which would provide a line through Uzbekistan and Turkmenistan into Iran via the existing gauge change point at Sarakks.

There is a fourth possible route to the south from Kashgar, again briefly transiting Kyrgyzstan into Tajikistan. This alignment would join the Tajik system and run south across the River Amu Darya to the newly-opened Afghanistan system near Mazar-e-Sherif. Plans are advancing to extend the Afghan system eastwards through to Herat where it will join the now largely complete Iranian connecting line from Torbat, thus providing onward rail access either south to the Persian Gulf or through Turkey. Turkish links with Europe are set to improve with the imminent opening of the Marmaray rail tunnel under the Bosphorus. There are also plans to build a new line circumventing Lake Van, however, this is still a long way off, and a new train ferry service recently entered service.

In addition to aiding Chinese export trade, the driving force for these developments is heavy industrial growth in Urumqi and Kashgar in Western China. Mountainous areas in central Asia, particularly in Tajikistan which has substantial reserves of high quality coal and anthracite, are well placed to supply the raw materials required.

Reducing freight transit times is another factor behind the development of these lines. The Central Asian rail network has the potential to attract traffic away from deep sea container routes from China to the Middle East and Central Europe which suffer from long and arduous journeys; it can take two or three days alone to transit between Western China and the seaboard, which is followed by a journey that rounds the Singapore Peninsula and has to overcome the congested sea lanes through the Red Sea, Suez and Bosphorus, all the while being conscious of Somali pirates. However, crossing borders is a major potential difficulty for railfreight given the number of transit countries on the proposed routes, and will add to the time and cost of transporting goods overland. And despite being a longer journey, the price of seafreight has also fallen dramatically following the financial crisis of 2008-09 meaning that for many industries it remains the most cost-effective means of transporting goods from China to the west.

Sheer cost

The sheer cost of building infrastructure, particularly that capable of penetrating the Kyrgyzstan Mountains, was a previous barrier to detailed planning of the Kyrgyzstan/Uzbekistan route, while gauge change will be necessary on this line further increasing journey times.

In contrast the Tajik route is largely valley and easier to navigate. At present Tajikistan has only three unconnected lines into Uzbekistan which need integration. A study of potential traffic is taking place for the route, a development in which Iran is showing much interest, while the United States is gauging the potential of an additional supply route. In addition, the project is listed by the Asian Development Bank as a future possibility, while Tajikistan is very keen to link up with neighbouring rail networks as a means to export its raw materials. A journey along the route last year elicited information that completion of the route is a Chinese regional objective, but not yet adopted nationally.

The over-arching potential for this route is that Afghanistan's network will be standard-gauge, enabling it to connect with rail networks to the west. The Chinese system is also standard-gauge, so if the missing links are built to these standards, and some dual gauge is added in Tajikistan from Kurgan Tube to Vahdat, a China - Middle East - Europe standard-gauge corridor can be created - the Holy Grail indeed.

While the Trans-Siberian will remain the most attractive corridor to traffic from China to Europe, intermediate traffic is better suited to this alternative surface route, which has the potential to offer competition to the Trans-Siberian's current stranglehold on all trans-Asian rail movement.

Despite a two-year setback due to corruption scandals and the fatal Wenzhou accident, China is on course to complete its 18,000km national high-speed rail network by 2015 as planned. Han Qiao from China Features in Beijing investigates the current state of play for the world's largest high-speed network.

THE Ministry of Railways (MOR) made it clear at the Modern Railways 2012 exhibition in Beijing in November last year that the 2011-2015 railway development programme will continue unchanged. MOR said China will complete its backbone network of four north-south and four east-west high-speed lines by 2015. As a result the total length of the high-speed network will double to reach 18,000km.

Total investment in the railway sector during the five-year period will also remain unchanged at Yuan 2.8 trillion ($US 449bn). This represents an increase of 15.7% compared with the level of investment during the 2006-2010 period, says MOR.

China's ambitious high-speed railway development programme suffered a major slowdown in early 2011 when former railway minister Mr Liu Zhijun was removed from office on charges of corruption. The collision at Wenzhou between two high-speed trains in July 2011 which killed 40 people dealt another heavy blow to the programme.
For the past two years, the Chinese government has taken a cautious approach to high-speed rail development, while efforts have been directed at improving safety management. More stringent commissioning and testing procedures following Wenzhou means it now takes far longer to put a new line into operation.

The Wenzhou accident also led to a cut in the maximum speed on high-speed lines as China introduced a safety margin of at least 50km/h between the maximum design speed and the maximum operating speed. MOR has not given any indication that it is willing to increase the maximum speed above the current limit of 300km/h. According to MOR, the length of high-speed lines with a design speed of 300-350km/h will be 6700km and that with a design speed of 200-250km/h will be 11,300km by 2015.

Wenzhou had a major impact on investment which fell sharply in 2011, and continued its downward trend in 2012. Manufacturers also faced a tough time, as MOR launched very few tenders for the procurement of high-speed trains during this period.

The first signs of a recovery were noticed in the second half of 2012, when China put five lines totalling 2563km into operation between June 30 and December 1. This compares with just two lines of 1420km during the previous 18 months. The Beijing - Zhengzhou line was scheduled to open by the end of last year, bringing the total length of high-speed lines to 9300km. This is also the final section of the 2287km Beijing - Guangzhou - Shenzhen line, the longest high-speed line in China.

China's decision to resume railway development became even more apparent in November at the 18th National Congress of the Communist Party when Chinese leader Hu Jintao summarised the country's achievements of the past five years. Hu spoke highly of the high-speed rail development by listing it together with China's manned spaceflight and the lunar exploration programme as the country's main breakthroughs in innovation.

MOR has not announced the amount of investment for 2013 yet. But Mr Li Changjin, chairman of China Railway Group, one of the top state-owned railway construction companies, revealed in November that Yuan 600bn will be invested in railway construction, of which 60% will go to high-speed projects. The money will mainly be sourced from bank loans and by issuing bonds. The planned level of railway investment in 2013 is likely to match that in 2009, when China introduced a massive stimulus package soon after the outbreak of the US subprime crisis.

China's total railway investment falls into three main categories: railway construction, upgrading existing lines, and train procurement. Industry insiders often measure the performance of the sector by referring to railway construction investment as it accounts for roughly 80% of total spending, while line upgrading accounts for a tiny part of the total budget and the amount spent on train procurement is closely associated with the number of construction projects.

Investment recovery

Investment in railway construction started to recover in August when monthly figures revealed investment of Yuan 39.4bn, a year-on-year increase of 19%. In September, the level of investment jumped by 112% to Yuan 64.2bn. In October, construction investment rocketed by 240% to Yuan 69.8bn, and November showed a 142% increase to Yuan 70.1bn.

According to the 2011-2015 plan, China needs to bring about 9000km of high-speed lines into operation between 2013 and 2015. Railway construction companies say work on these lines has started and they expect the market to heat up in a few months.

This will have a direct impact on the rolling stock market as Mr Zhang Yong from CNR revealed. "The railway ministry usually starts the bidding process for train procurement 18 months before a line is scheduled to open," says Zhang. "So we expect to have new orders soon."

Not all the high-speed lines under construction form part of the four-horizontal and four vertical lines. Other lines include those linking Chengdu with Guangzhou, and Datong - Xi'an.

Industry insiders say local governments in China have shown great interest in building high-speed railways, and are likely to provide funding for future high-speed rail construction.

Mr Wang Mengshu, an expert on railway technology and a member of the Chinese Academy of Engineering, says railway investment remains an effective way to drive economic growth and create jobs for hundreds of thousands of farmers who migrate into cities for better-paid jobs.

MOR said in a report in November that the number of passengers carried by high-speed lines now accounts for 25.7% of total passenger traffic. China's 1580 high-speed trains transport 1.33 million passengers daily.

Though China has reduced the maximum speed on high-speed lines following Wenzhou, high-speed services are still much faster than conventional trains and passengers' enthusiasm for taking high-speed trains has not been dented.

Passenger revival

The Beijing - Shanghai high-speed line has seen a passenger revival. Traffic was at a low ebb in the third quarter of 2011 due to Wenzhou, but it has picked up steadily since the first quarter of 2012.

Traffic on the Beijing - Tianjin high-speed line has grown at an annual rate of 20% since it opened in 2008, according to MOR, and the line has transported 88 million passengers so far. On busy days, trains run at five-minute headways.

The high-speed lines currently in operation run mostly from north to south. But as the east-west lines enter service, the network will take shape and become more attractive as new journey opportunities are created. As a result, traffic is expected to grow even faster in the years ahead.

The recent launch of China’s Beijing-Guangzhou high-speed rail—the longest high-speed line in the world—is more than a technological triumph. It’s also a much-needed propaganda boost for the country’s Railways Ministry, buffeted in recent years by fatal accidents, high-level scandal, and skepticism about safety standards
Trains have played an iconic role in the Chinese zeitgeist, especially for the nation’s leaders. The late Mao Zedong’s favorite mode of travel was by train. (He often enjoyed the company of young female attendants in his private car.) For much of the post-Mao period, the Communist Party’s top ranks were dominated by men trained as engineers; they dreamed of a national network of glittering train tracks uniting their domain, from the Pacific to the Himalayas. Moreover, the speed and mobility of train travel placed huge prestige on Beijing’s ambitious high-speed rail project, launched in 2008, which set out to build tens of thousands of kilometers of high-speed rail criss-crossing the country by 2020.
Saluted by attractive train attendants wearing high-collared burgundy coats and beret-style hats with the railway logo, a sleek white CRH380A (L) bullet train, emblazoned with navy speed stripes, pulled out from snowy Beijing at 9 a.m. on Dec. 26. Within 15 minutes it had reached cruising speed of 300 kilometers per hour. By 5 p.m., the train had snaked into the southern industrial hub of Guangzhou, 2,298 kilometers away, met by flowering shrubs and temperatures 20 degrees higher than in at its wintry point of origin.
 The high-speed journey through five provincial capitals now takes eight hours, compared with the 22-hour trip on older, conventional trains. First-class tickets cost the equivalent of $221, more expensive than an economy-class air ticket. Although the plane ride is only three hours long, riding the rails appeals to business travelers tired of the hassles of air travel, including the frequent delays that have infuriated passengers so much that riots have broken out at airline counters. “A journey on the train is more pleasant,” businessman Yang Zengyu told local media after taking the newly inaugurated train. “Even for frequent fliers like me, It’s an attractive alternative.” The main drawback, he said, was the lack of reliable Internet access on the train.
The opening of the Beijing-Guangzhou line is also an important psychological marker. China’s rail sector had been under a cloud since a fatal high-speed train accident in July 2011 killed 40 people and raised questions about whether the headlong rush into high-speed rail development allowed for adequate safety testing. The Railways Ministry ordered a safety review of all projects under construction, and train speeds were slowed from 350kmh to 300kmh—a regulation that remains in force. Pending projects also were suspended during the post-crash period, and the opening of the Beijing-Guangzhou line was delayed by a year. Earlier that year, in February 2011, Railways Minister Liu Zhijun had been purged in a major corruption probe, tarnishing his ministry and the high-speed rail campaign that had been his pet project. He was expelled from the party in May 2012.
Now, with the successful opening of the Beijing-Guangzhou line, the high-speed campaign is back on track. Many suspended projects have resumed construction, and the ministry has secured $96 billion in investment for rail infrastructure next year. Railways Ministry transport bureau deputy head Zhao Chunlei announced that the country’s network of high-speed lines, linking secondary routes to major ones, are on schedule for completion by 2015—and by 2020 the nation’s rail system will include 120,000 kilometers of track that connect all provincial capitals and cities with populations exceeding half a million. The high-speed lines “will enhance economic integration of cities along the line,” Tian Xuebin of the Hebei University of Economics and Business said.

ARGENTINA's president Mrs Christina Kirchner announced on January 10 that the government has placed an order with China Southern Rolling Stock (CSR) for 409 1676mm-gauge emu cars to replace life-expired trains on the Mitre and Sarmiento suburban lines in Buenos Aires.

A total of 55 sets will be delivered, comprising 225 vehicles for the Sarmiento Line and 184 cars for the Mitre Line. The total cost per vehicle will be $US 1.265m, excluding transport from production sites in China and spare parts. The first vehicles are due to arrive in Argentina in February 2014 and the deliveries will be completed by November 2015.

According to local media reports, the contract was awarded in a closed tender and all production will take place at CSR facilities in China.

"This is the most important railway renewal of the last 60 years and will replace all trains on the Mitre and Sarmiento Lines that are more than 50 years old," says Kirchner.

The announcement comes just weeks before the first anniversary of the fatal collision at Buenos Aires Once station on February 22 2012, which killed 51 people and injured more than 700.

FOLLOWING China's first public tender for low-floor LRVs, CSR Nanjing Puzhen Rolling Stock has been awarded a contract to supply 18 Flexity 2 vehicles for the first phase of the light rail network in Suzhou, which is currently under construction.

The order is the first to be won by CSR Puzhen under the 10-year licensing agreement with Bombardier the two companies signed in July last year, which allows CSR to manufacture and sell low-floor LRVs in China using Bombardier technology.

The five-section bi-directional vehicles for Suzhou will be 32m long and 2.65m wide.

China's apparently unstoppable growth has been the driving force behind the global resource boom of the last decade. That most of the new projects in West Africa have strong Chinese backing should be no surprise. At a presentation to the Sydney Mining Club in March last year, Mr John Welborn, chief executive officer of Australian miner Equatorial Resources, which is currently developing a mine and railway in Congo, quoted China Iron & Steel Association official Mr Wu Xichun: "By 2015, China wants to import 50% of its iron-ore from Chinese owned mines elsewhere in the world."

China's boom continues, apparently impervious to gloomy warnings from some quarters that its economic growth is slowing. "Like so many commodities today, the development of iron-ore in West Africa is a China story," Welborn told IRJ. "Chinese steel mills are desperately seeking new sources of supply to diversify their reliance on the Big 3 [Rio Tinto, BHP and Vale]."

Much of this ore will come from West Africa. New mines have opened in Liberia and Sierra Leone, countries previously more famous for vicious civil wars than mining, new mines are being developed in Congo, and extraction of a vast iron-ore deposit - possibly the world's largest - is imminent in Guinea.

In each of the new projects, the miners have either rebuilt a railway to carry ore to the coast, or have plans to build new lines, sparking a railway boom on a scale not seen in Africa since the colonial era. The difference this time is that governments are demanding a slice of the action, while the miners have had to satisfy shareholders that the projects minimise environmental damage and create jobs.

Heavy-haul railways are not new to West Africa. In Liberia, the 267km standard-gauge Lamco (Liberia American Mining Company) Railway - recently rehabilitated by steel giant ArcelorMittal - was already running

90-wagon 10,700-tonne ore trains in the 1970s. In neighbouring Guinea, the Compagnie de Bauxite du Guinea (CBG), assisted by the Aluminum Corporation of America (Alcoa), operates the Boké Railway, which has been quietly getting on with heavy haul for the last 40 years with six-daily 13,000-tonne bauxite trains behind pairs of EMD SD40-2 locomotives. And in Mauritania, 16,800-tonne ore trains run most days on the 704km Société Nationale Industrielle et Minière (SNIM) line from the mines at Zuoerate to the port at Nouadhibou, incidentally providing a vital passenger service for locals across the road-less desert.

What is new to the region, however, is the massive scale of the projects, and, in some cases, the sheer speed at which they are being accomplished, driven as always by the urgency of China's need for raw materials. This report covers the major heavy-haul rail projects either currently underway or where construction is imminent.

Liberia

In 2007, ArcelorMittal, the world's biggest steelmaker, won a concession to redevelop the slumbering Tokadeh Mine in the north of the country and rebuild the port of Buchanan and the old Lamco railway which had ceased operating in 1992 after rebel attacks. As a result, the railway needed a complete overhaul from the ballast up.

"The challenge Liberia faced - to rebuild a country after decades of civil war - was enormous," ArcelorMittal Liberia (AML) spokesperson Ms Hesta Pearson told IRJ. "The railway was badly damaged and had to be rehabilitated. AML had to re-ballast the tracks, replace rails and sleepers, rebuild all bridges, replace culverts and construct rail access roads."

By the time AML took over, most of the railway's original locomotives had rusted away but much of the rolling stock could be saved. Better yet, the line itself was mostly intact, if hidden in the undergrowth. "In fact local villagers used parts of the line with small hand-propelled trolleys named 'make-a-ways' to take produce to market," says a source close to the project. "These were quite rustic being made of wood with old car bearings for 'wheels'."

AML chose Brazilian contractor Odebrecht to rebuild the 243km stretch from the Tokadeh mine to Buchanan. The company wanted to get the line back in operation as quickly as possible. After clearing the vegetation, every fourth sleeper under the original 59.9kg rail was replaced, opening the line for ballast trains, after which the remaining sleepers were replaced.

Meanwhile, the company set about repairing rolling stock. By the end of 2011, 195 of the original ore wagons had received new bogies, brakes and rotary couplers - crucial for use in rotary tipplers at the port - and two 90-wagon rakes were available for service. To haul them, AML bought three new 3.3MW ES44AC locomotives from GE to complement a solitary EMD GP38-3 locomotive.

The line reopened to traffic in May 2011. In September that year, Liberia exported ore for the first time in 20 years and by the following December, three ore carriers had been loaded at Buchanan and there was a large stockpile awaiting shipment. The total bill for refurbishment of the railway, mine, port and ancillary infrastructure was $US 800m.

"We currently run two trains a day, with 70 wagons per train," says Pearson. Frequency will increase to three trains a day in the dry season.  Loads are 80-90 tonnes per wagon, although tonnage varies according to train schedule. AML has reportedly run trials with 120-wagon trains, and 140-wagon rakes could be introduced in the future, aided by the use of distributed power.

Sierra Leone

If ArcelorMittal Liberia's railway project was quick to market, African Minerals' $US 1.2bn refurbishment of the former Marampa mining railway and port in Sierra Leone was completed at light speed, which indicates the pressure miners are under to get their ore to market.

In 2009, London-based African Minerals signed a 99-year lease with the government of Sierra Leone to rehabilitate the 74km 1067mm-gauge railway from the port of Pepel to the old mine at Marampa (now owned by fellow miner London Mining) and build a 126km extension to a new iron-ore mine at Tonkolili.

It seemed a tall order: the civil war in Sierra Leone destroyed the country's transport network and by 2010, according to a Bloomberg News report, the country was ranked third-lowest on the World Bank's 2010 logistics performance index which measures efficiency and quality of transport networks.

In a bold move, African Minerals decided to raise capital and begin construction of the mine and new railway even before the final resource estimate was known. It was the right decision - the ore body consists of an estimated 11.6 billion tonnes of magnetite lying under 1.1 billion tonnes of saprolite with 126 million tonnes of direct shipping ore (DSO) lying on top of both. Mining the latter would support the company for about nine years while the other ore bodies are developed.

Of the $US 3bn of debt and equity that the company has raised, $US 1.5bn is from the Shandong Iron & Steel Group in China. In return for its investment, the Chinese steelmaker will receive 10 million tonnes of iron-ore a year at a preferential rate.

As the railway's original rolling stock and locomotives were beyond repair, African Minerals bought new bottom-dump hoppers, and private South African locomotive operator RRL Grindrod is building a second batch of 14 RL30SCC Co-Co diesel-electric locomotives for the railway to complement the 20 that African Minerals has already leased from the company.

Tonkolili began production just 14 months after the mining permit was issued and the first ore trains ran in November 2011. As a Bloomberg report noted in 2012, until the first trains operated, Sierra Leoneans had not seen a functioning locomotive in nearly three decades. With production gradually being ramped up, the railway is expected to be carrying iron-ore at an annual rate of 20 million tonnes by the second quarter of this year.

The second phase of the project - which will see annual tonnage eventually increase to 50 million tonnes, and involves construction of a port at Tagrin Point, and a standard-gauge heavy-haul railway from there to Tonkolili - is already underway.

Guinea

The biggest West African rail project of all has yet to see a single sleeper laid. Lying in the Simandou Range in eastern Guinea is what may be the world's largest iron-ore deposit, which has attracted interest from heavyweights Rio Tinto and Brazil's Vale.

Rio estimates Simandou's output at 95 million tonnes a year by 2015. To haul the ore, Rio plans to build a 670km standard-gauge railway from the mine west across the country to a port to be built south of the capital Conakry. The project is being developed by Guinean-registered Simfer which is owned 5% by the International Finance Corporation and 95% by a company jointly owned by Rio Tinto and the Aluminium Corporation of China (Chalco).

The planned railway is a project of epic scale. While it would be quicker and less costly to build a shorter line south from the Simandou Range to a new or existing port in neighbouring Liberia, the Guinean government has pushed Rio Tinto to build the new east-west railway to boost the country's development, according to a report from Bloomberg.

The proposed railway will be single-track with 13 passing loops. There will be three tunnels, 34 river bridges and nine bridges over roads. The terrain is around 20% dense forest and about 25% open woodland.

The biggest challenge for the builders will be the 70km crossing of the heavily-forested Mamou Mountains in the centre of the country, a section that will require five river bridges and 78 culverts. Two tunnels of 12km and 11.6km will also be needed. Each tunnel will be fitted with security gates at both ends to prevent pedestrians using them as thoroughfares, a further indication of the unusual environment facing railway operators in Africa.

Trains will be 240-wagon consists hauling up to 37,000 tonnes of ore each, pulled by six GE ES44AC locomotives distributed in pairs throughout the train. The company plans to run nine loaded ore trains daily plus a fuel train from the port to the mine every two days. Track speed is pegged at 80km/h for loaded trains and 100km/h for empties, giving 36 hours for a round trip from the mine.

Rio Tinto has been prospecting in the Simandou range since 1996 and has committed over $US 3bn to the project so far. According to a Rio Tinto spokesperson, the company is currently finalising the engineering studies in relation to the railway works. "The rail SEIA was completed in September 2012 and is currently under review by the state," he says.

In a key development in October, the state declared it a "Project of National Interest" which effectively protects land needed for the rail and port infrastructure from being bought or developed by third parties while the project secures the relevant rights. Meanwhile, early works which are part of the rail and port construction have begun.

It is happier story for Rio Tinto than fellow miner Vale. The Brazilian group had proposed building a new line southwards from its planned Zogota mine at Simandou through Liberia. Production at Zogota was due to begin in 2012 but according to Reuters in November, Vale has since put the mine and railway on hold, citing "cool demand and opaque regulation."

Congo

For Equatorial Resources, the Australian miner currently busy developing a deposit in the Congo, the proximity of its mine to an existing heavy-haul railway was a rare stroke of luck. Equatorial's Mayoko - Mossendjo Iron Project plans to transport its ore along a 285km 1067mm-gauge dedicated heavy-haul line built in 1962 to carry manganese from the north of the country to a connection at Mount Bélo on the Congo Océan Railway (CFCO) which links Brazzaville, the capital, to Pointe Noire on the Atlantic coast.

"We were pleasantly surprised by some aspects of the rail system," Welborn told IRJ. "While there are challenges, we can use [the line] right away."

In August 2010, Equatorial Resources entered into a 25-year agreement with the Congolese government to use a 465km section of the railway from the mine to Pointe Noire. A subsequent funding agreement was signed with CFCO in October 2011. As part of the deal, Equatorial Resources' investment in the line will be regarded as payment up front for future rail charges.

Welborn says Equatorial Resources will share the rail link with other mining companies such as South African miner Exxaro which is also developing a mine close to the existing line.

The mining companies will operate their own trains on the line and Equatorial Resources is currently investigating potential locomotive builders in South Africa, Eastern Europe and China. Welborn says the fleet will likely be a mixture of owned and leased units. The company anticipates moving around 5 million tonnes a year when production begins.

Cameroon and Gabon

In Cameroon, Sundance Resources is developing the $US 4.7bn Mbalam Iron Ore Project and plans to build a 510km railway from its Mbarga mine to a new port to be built at either Lalobé or Kribi. The project gathered new momentum last November after the Cameroonian government authorised the Mbalam Rail Corridor, effectively setting aside the land earmarked for the corridor. Projected annual tonnage from Mbalam is 35 million tonnes. Sundance also plans to build a 70km extension from Mbarga to the Nabeba mine in Congo.

In 2011, Sundance apparently signed a port and rail access deal with Australian miner Legend Mining which plans to mine a large ore body at Ngovayang. Sundance's proposed rail corridor passes close to Ngovayang. Sundance is currently in the process of being acquired by Hanlong Mining, a deal that is widely regarded as crucial to the project's success.

Gabon is also on track to enjoy its own infrastructure boom as mining projects move closer to fruition. The standard-gauge 684km Transgabonais Railway, built at crippling cost between 1973 and 1986, already carries manganese from Moanda in the southeast to the port of Owendo, traffic that Comilog used to send via Congo on the line that Australian miner Equatorial Resources has earmarked for its Mayoko ore project. Comilog subsidiary Setrag has a 30-year concession to operate the railway which includes providing a guaranteed freight and passenger service along with the manganese traffic.

Gabon's main iron-ore deposits are at Belinga and Makoukou in the northeast. As a result of the Gabon government's recent cancellation of a concession awarded to CMEC of China in 2007, possibly due to concerns that the company would not be able to deliver, it is unclear who will develop the resource. In February 2012, Reuters reported that the Belinga concession had been awarded to BHP Billiton but the company declined to comment.

Whoever does win the concession will be faced with the prospect of building a 237km railway from the mines to a junction with the Transgabonais at Booué in the centre of the country. There is also the possibility that due to high ore tonnages, the line would have to be extended to a new port that may be built at Santa Clara, near Owendo.

Chinese state-owned contractor China Railway Construction has been awarded contracts worth a total of CNY 13.4 billion (US$ 2.2 billion) for railway electrification, railway construction and road building projects in China.

The company won a contract to construct a 53 km section of the planned 362 km high-speed rail line connecting the cities of Zhengzhou in Henan province, north-central China, and Xuzhou in Jiangsu to the north-east of the country, with a bid of CNY 3.6 billion (US$ 572 million). The Zhengzhou to Xuzhou rail line is scheduled for completion by the end of 2016.

It also won another bid to install electrification systems for a section of Lanxin Railway in north-western China – a CNY 5.2 billion (US$ 835 million) contract that also included the reconstruction of Xining railway station in Qinghia province, and the construction of a second double line of rail track at Lanzhou pivot railway hub in Gansy Provice, north-west China.

In the roads sector, China Railway won a CNY 2.3 billion (US$ 369 million) contract for the construction of section B of the Maliuwan-Zhaotong section of Chongqing–Kunming Highway in Yunnan province as well as separate contract worth CNY 2.5 billion (US$ 402 million) for the construction of section C of the Maliuwan-Zhaotong Section of Chongqing–Kunming Highway .

Revenue from the [Passenger Railway Transport industry in China has been increasing at an annualized rate 13.1% over the past five years to $25.4 billion in 2012, says IBISWorld. China's railway system entered a period of growth in late 2008 when the government invested heavily in railway construction to increase railway capacity and to offset the adverse effects of the global financial crisis.

This industry is subject to a medium to high concentration level, with the top four players accounting for about 58.5% of China's total railway passenger numbers in 2012. Rail transportation businesses in China are executed by 18 railway administrations (i.e. enterprises) under the control of the Ministry of Railway. The major railway administrations include those in Shanghai, Shenyang, Beijing, and Guangshou. In March 2005, the newest railway administrations – Taiyuan, Xi'an and Wuhan – were established.

Due to the shortage of investment on railways and the current inadequate capacity of railway transportation, private capital and foreign investment has been encouraged by the government in recent years. However, little progress has been made due to low levels of marketing within the [Passenger Rail Transport industry. As further reforms are made, non-state-owned players are expected to increase in numbers, which will decrease the industry's concentration level.

Steady industry performance is expected in future years with a large number of passenger-dedicated railways being constructed, says IBISWorld. This will lead to a separation of freight and passenger transportation services and increase passenger transportation capacity.

China’s new 300km/h north-south rail link from Beijing to Guangzhou uses Bombardier’s ERTMS technology
BOMBARDIER INTERFLO 450 solution operating on over 85% of China’s very high speed network (over 300 km/h), helping to move the world’s most populous nation

Rail technology leader Bombardier Transportation’s European Rail Traffic Management System (ERTMS) technology is operating on the latest very high speed rail line to open in China. The new line completes the world’s longest very high speed rail link, connecting the capital Beijing with the industrial centre of Guangzhou.

Equipped with Bombardier INTERFLO 450 ERTMS Level 2 technology (called CTCS-3 in China), the final section of the 2,298 km long north-south, double-track link between Beijing and Zhengzhou started operation on December 26, 2012. With operating speeds of 300km/h, the line has cut rail travel times from 22 hours down to around eight hours, boosting transportation capacity and economic development along the route.

This latest high-profile line to be opened, equipped with the BOMBARDIER EBI Com 2000 radio block centre and EBI Cab 2000 ATP onboard technology, is Bombardier’s most recent contribution to China’s very high speed rail network. It comes exactly three years after the implementation of its ERTMS Level 2 technology on the first section of the new link, which was then the world’s fastest ERTMS line. The 1000 km Wuhan to Guangzhou line opened in 2009 with an initial operating speed of 350 km/h. Bombardier’s technology, is also operating on the flagship Beijing to Shanghai line since 2010, on two routes linking Shanghai with Hangzhou and Nanjing, as well as on the Hefei to Bengbu and the recently opened Harbin and Dalian lines.

Peter Cedervall, President Rail Control Solutions, Bombardier Transportation, said: “Our projects in China are an important part of our global ERTMS portfolio and project delivery experience. Trains equipped with Bombardier’s state-of-the-art very high speed rail control technology have now travelled more than 300 million km in China. That is the same distance as a return trip to the sun, with a further 15 million km added every month. We have more than 1.5 million hours, or 170 years worth of operational experience in this market alone, reflecting the maturity and reliability of our ERTMS technology.”

Jianwei Zhang, President of Bombardier China, added: “In China, Bombardier’s wayside and onboard ERTMS signalling equipment services more than 9,800 km of track and around 300 trains. This constitutes over 85% of around 11,200 km of very high speed track in operation. It is an impressive contribution to the development of the country’s rail infrastructure, enhancing people’s travelling experience and promoting economic development. Bombardier continues to be a valued partner to the Chinese Railways in ensuring the latest rail control technology is delivered in the market.”

With a strong involvement in the development of ERTMS/ETCS technology, Bombardier’s solutions are operating or being delivered on more than 2,500 vehicles and 15,000 km of track in 16 countries. As well as running on the highest speed lines in China, the INTERFLO 450 Level 2 solution has permission for commercial operation on the Amsterdam-Utrecht line in the Netherlands, one of the busiest mainlines in Europe, and was inaugurated on Sweden’s first high speed ERTMS Level 2 line, the Botnia line, in 2010.

Bombardier ERTMS technology is also installed in Croatia, Korea, Switzerland, Spain and Taiwan and first-in-market projects are being delivered in Algeria and Poland, in addition to extensive framework agreements in Sweden and Norway. Bombardier is at the heart of innovation, delivering the world’s first ERTMS Regional system, its INTERFLO 550 solution, on the V?sterdal Line in Sweden.

The future success of urban centres rests on re-defining the way people move within and between these expanding social and economic hubs. Congestion and pollution pose serious challenges to the growth of industrialised and developing nations. Rail presents a low carbon alternative to air and road as the backbone of national transportation infrastructure. Around the world, Bombardier Transportation moves hundreds of thousands of people quickly and efficiently to their destinations. Modern high speed rail offers passengers an attractive alternative to motorways and medium distance air travel because of quick boarding and travelling comfort.

About Bombardier Transportation in China
As the world’s largest rail equipment manufacturer, Bombardier is actively involved in China’s development of urban mass transit and advanced railway networks. With four joint ventures and seven Wholly Foreign Owned Enterprises (WFOE), Bombardier Transportation currently employs more than 4,000 people in China. It has offices located in Beijing, Shanghai, Guangzhou and Hong Kong.

Bombardier offers the broadest portfolio in the rail industry and delivers innovative products and services that set new standards in sustainable mobility. Headquartered in Berlin, Germany, Bombardier Transportation has a very diverse customer base with products or services in more than 60 countries. It has an installed base of over 100,000 vehicles worldwide.

During the Spring Festival travel season (January 26 – March 6), which is the nation’s most important traditional festival for family reunions, the rail transport capacity will still be below what is required, an official at the Ministry of Railways (MOR) said Tuesday.

Over the 40 days of this year’s Spring Festival travel season, approximately 225 million passengers, up 4.6 percent from last year, are expected to travel using the railways, resulting in an average daily passenger volume of 5.61 million and a peak daily volume of 6.95 million people, according to the China Scope Financial.

In order to cope with the upcoming passenger flow, 309 railway stations in China have set up temporary waiting rooms. The MOR admitted that the current rail transport capacity is finding it hard to meet real demand.

 

The launch of Harbin-Dalian and Beijing-Guangzhou high-speed railways this year has also expanded China’s rail transport capacity, the official said.

Meanwhile, Beijing intends to continue the toll-free policy for passenger cars during the Spring Festival.

A source close to the Ministry of Railways (MOR) disclosed recently that China’s fixed-asset investment in the railway sector for this year has been preliminarily set at $650 billion yuan, of which $530 billion yuan will be infrastructure investment. The planned amount is around $20 billion yuan higher than in 2012. In addition, the MOR will focus on fundraising this year by further attracting private capital, effectively using idle capital, and diversifying operation methods.

According to the 12th Five-year (2011-2015) Plan for the Railway Industry, a ‘four-vertical’ and ‘four horizontal’ high-speed railway network will be completed in China by 2015. It is estimated that the MOR needs to invest at least CNY 500 billion each year in railway construction from 2013-2015 to reach this goal.

This year, more than ten major rail lines are expected to start operation in China. The lines include the Tianjin-Baoding railway, the Ningbo-Hangzhou high-speed railway, the Xiamen-Shenzhen railway, and the Chongqing-Lizhou Railway.

The listed companies that may benefit from the increase in railway investment include: China Railway Construction , China Railway Group, China South Locomotive and Rolling Stock , and China CNR.