BEIJING, May 24 (Xinhua) -- Booming demand for urban rail transit from an increasing number of Chinese cities would reignite the railway equipment industry, the China Securities Journal reported Friday.

 

The National Development and Reform Commission (NDRC) on Thursday revealed an urban transit plan for Kunming, capital of southwest China's Yunnan Province, that features a total investment of 63.49 billion yuan (10.34 billion U.S. dollars).

 

The NDRC, China's top economic planner, has approved urban transit construction plans for several cities, including Guiyang and Chongqing, for 2013.

 

Official statistics indicate that total urban transit investment has reached 1.23 trillion yuan thus far, of which 189.6 billion yuan was used to build 337 km of subway lines in 2012. Another 220 billion yuan will be used to build 290 km of subway lines in 2013.

 

The increased input has accelerated the expansion of the rail equipment industry.

 

China CSR and China CNR, China's two biggest train manufacturers, have boosted their business with the help of the increased investment. China CSR is filling orders for urban transit vehicles in the cities of Shenzhen, Shanghai and Chengdu, while China CNR has signed agreements concerning train manufacturing or cooperation in public transit with several cities.

 

The increasing development of intercity railways will also benefit the rail equipment industry. The Pearl River Delta, one of China's most developed areas, will spend 118 billion yuan on intercity railways from 2012 to 2020. China CSR and China CNR have produced new trains that specifically cater to intercity railway networks.

 

The intercity railway market is hoped to boost the slumping profits of the two companies, which have seen their income drop due to the country's suspension of bidding for bullet trains in 2010.

 

China CSR saw its year-on-year net profits fall in the first quarter of 2013, with income from bullet train sales slumping 50 percent from a year earlier to 3 billion yuan, according to a report from UBS Securities.

 

China CNR's quarterly report also showed weak performance, as its total sales amounted to 18.15 billion yuan, down 1.35 percent year on year.

 

However, the gloomy trend is likely to be reversed in 2013 due to the looming resumption of bullet train bidding, the journal reported.

 

The China Railway Corporation (CRC), newly formed in March 2013 after the breakup of the Ministry of Railways, has finished preparing for restarting the bidding, which is expected to begin in May or June.

 

 

 

 

 

China Railway Corp, the spin-off from the now-defunct Chinese Ministry of Railways, suffered an after-tax loss of 6.88 billion yuan (HK$8.7 billion) in the first quarter, compared with an after-tax profit of 196 million yuan for the whole of 2012, according to its first bond prospectus. Revenue amounted to 236.21 billion yuan in the first quarter, compared with 963.25 billion yuan for the whole of last year.

 

For its bond issue, the state-owned firm plans to issue 20 billion yuan of five-year bonds to finance rail construction, the purchase of rolling stock and for general working capital.

 

The company, established on March 14 with a registered capital of 1.04 trillion yuan, assumed the business operations of the Ministry of Railways after it was broken up.

 

"If the company sustains losses in the long term, it will be difficult for them to borrow, but if people think the government will continue to support the company, it can still get debt financing," said Ivan Chung of Moody's Investors Service, an international credit rating agency.

 

"In the past, people saw it as part of the government, so people did not care about the financial numbers, but now they care about the financial statement and profit and losses.

 

"Now it's no longer the Ministry of Railways, it's a new company. So is it still able to borrow at low cost as the Ministry of Railways had done, or will the market perceive it as risky so that its borrowing costs will go up?

 

"Now the company is testing the market to see if it can get financing from the market. What's interesting is how the market will respond to the bond issue and what the interest rate will be."

 

For this year, China Railway has budgeted fixed-asset investment of 650 billion yuan, more than the nation's fixed-asset investment in railway of 634 billion yuan last year, said its bond prospectus.

 

The fixed-asset investment of 650 billion yuan includes 520 billion yuan of rail construction spending. Some 5,200km of railway will be built this year, said the prospectus.

 

The company's gearing ratio rose from 57 per cent at the end of 2010 to 62 per cent on March 31. Its debt totalled 2.84 trillion yuan on March 31.

 

 

 

 

 

 

Thailand plans to build four high-speed train lines from Bangkok to Chiang Mai, Nong Khai, Rayong and to Padang Besar on the Malaysian border.

 

The routes are part of the government's 2-trillion-baht investment plan to improve the country's infrastructure in transport and logistics. The rail scheme is slated to be implemented from next year to 2019.

 

The high-speed train routes will be built in phases, with only the route to Rayong via Pattaya likely to be constructed in one stage.

 

Ms Yingluck welcomed Japan's interest in joining the bidding for the project, Mr Suranand said.

 

At least four other countries - China, France, South Korea and Spain - have expressed interest in bidding for the high-speed train contracts.

 

During the discussion, Ms Yingluck also sought support for the development of the Dawei deep-sea port in Myanmar and Thailand's 350-billion-baht water management scheme, Mr Suranand said.

 

The Dawei project, which includes the port and an industrial complex, would benefit Japanese investment as its location would facilitate links with markets in South Asia, the Middle East and Europe, Mr Suranand quoted Ms Yingluck as saying.

 

Ms Yingluck also made efforts to entice Japanese investors to support the Dawei project during an interview with Japanese broadcaster NHK yesterday morning.

 

She reiterated that the Dawei project will transform the Myanmar port town into a maritime hub and thriving industrial zone, government spokesman Teerat Ratanasevi said.

 

Once the Asean Economic Community comes into effect in 2015, Thailand and Myanmar will become gateways to Asia and nearby regions, she said.

 

Ms Yingluck pointed out that in addition to implementing the 2-trillion-baht infrastructure scheme, the Thai government has raised the daily minimum wage to 300 baht, as well as devising measures to lower production costs in a bid to equip the Thai population with higher spending power.

 

"With more purchasing power, Thai people can buy more Japanese products," Mr Teerat quoted the prime minister as saying.

 

During the interview, Ms Yingluck said she was confident Thailand's political conflicts can be resolved if every party is patient and engages one another in a democratic manner.

 

She said she has tried her best during the past two years to create an atmosphere that is conducive to foreign investment and restore international confidence in the Thai economy.

 

Asked about the role of her brother Thaksin, she said she is administering the country without him but admitted she has not abandoned his policies due to their popularity, the spokesman said.

 

During the interview, the premier also addressed the nation's internal conflicts, which included the violence in the deep South, saying that disputes could be settled only through peaceful and democratic means.

 

She said the ongoing peace dialogue with southern insurgents is aimed at building mutual trust and confidence.

 

Mr Suranand said that, during the discussion with Mr Abe, Ms Yingluck emphasised Thailand's support for peaceful means to solve conflicts in the South China Sea.

 

The country also welcomes talks to bring about peace on the Korean Peninsula, which should be nuclear-free, Mr Suranand said.

 

Thailand is the coordinator between the Association of Southeast Asian Nations (Asean) and China this year.

 

China, Taiwan and four Asean members - the Philippines, Vietnam, Malaysia and Brunei - claim total or partial sovereignty over the Spratlys and other islands in the disputed territorial waters in the South China Sea.

 

 

  

 

QATAR Rail has signed a design-build contract with a consortium led by Impregilo, Italy, for the Red Line North section of the Doha metro network.

 

The contract covers the construction of the 13km stretch of the Red Line from Mushaireb to Education City, which will have seven stations. The line will run in two parallel tunnels, each with an internal diameter of 6.17m.

 

Impregilo has a 41.25% share in the consortium, which also includes SK Engineering & Construction and Galfar Engineering & Construction.

 

Impregilo says the contract is worth €1.7bn, which includes €630m for planning and civil works and €1.1bn for preparatory works, electrical and mechanical systems, and architectural works at the five intermediate stations.

 

The stations at Mushaireb and Education City will be constructed by a consortium led by Yapi Merkezi, Turkey under a separate contract. Jacobs Engineering, United States, has been appointed as engineering manager for the project.

 

 

 

 

More than $1 billion in compensation has been paid to contractors of the cross-border express project because of unexpected changes in building the controversial HK$$67 billion railway.

 

This was disclosed in the Transport and Housing Bureau's paper in response to lawmakers' concerns after recent media reports about budget over-runs and a possible serious delay.

 

There were reports the project could face a delay of more than a year. But in the paper submitted to lawmakers, the bureau maintained that construction was still due for completion in 2015.

 

It said that by the end of last year, 97 claims from contractors had been resolved, with slightly more than HK$1 billion awarded.

 

It was not unusual, the bureau said, for contractors to encounter unexpected difficulties.

 

"Only minor amendments or enhancements to the design were made … in the course of works," it said. "If it is necessary to have more time or changes to more appropriate construction methods and machinery to cope with the situation ... payments will be made, in accordance with the contract terms."

 

The bureau said it had already earmarked about $5.4 billion at 2009 prices for such provisions.

 

Legislator Gary Fan Kwok-wai expressed concern that the government might have underestimated the difficulties of the construction work.

 

He said: "$1 billion is not a small sum. What we are most concerned about is that the unexpected difficulties might delay the project, and thus further jack up the costs of the already very costly project."

 

Construction started in January 2010, after lengthy debates in the legislature. Some opponents said the railway was only intended to make it more convenient for mainlanders to visit the city.

 

 

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THAILAND: High-speed railway lines connecting Thailand, Laos and China might soon become a reality after the Thai cabinet met with its Lao counterparts in Chiang Mai earlier this week.

 

The proposal would have a major impact on the region as there is currently only vehicle crossing from ASEAN countries into China.

 

Both governments are planning to spend billions on countrywide railroad infrastructure.

 

But in Laos, the plan will be nothing short of radical as the country's rail networks are practically non-existent.

 

The proposed massive rail projects will require loans totalling over half of the country's GDP, which was US$8.3 billion in 2011, according to the World Bank.

 

Chadchart Sittipunt, Thailand's transport minister, said: "I think the key message for Laos will be how to create value for this high-speed train for Laos. I think we need to talk because I think there will be a lot of investment for Laos. But how will they create value from this big investment? If they can do it, it will be a good connection between Kunming (China), Laos, and Thailand."

 

Rail links are not a surefire benefit to Laos' economy.

 

Nevertheless, Vientiane's ambition to transform the landlocked country into an integrated regional player is gaining support from its neighbours.

 

Last year the Thai government agreed to finance a US$55 million project to build a short railway line bridging Laos' capital with Thailand's Nong Khai province, while it plans its own railway overhaul to be completed in 2020 at a cost of US$69.6 billion.

 

 

 

Banihal, May 23: Deep inside the tunnel which cuts through the Pirpanchal Range here, workers are busy installing the lighting system. Technicians arrive to fix the emergency communication services and the control systems are tested to perfection.

 

The 11-kilometer Pirpanchal Railway Tunnel, longest in South Asia, which connects Cheral village in Banihal in Jammu Division with Qazigund in Kashmir Division, is being readied for regular operations.

 

“We have already handed over the rail line to the authorities and it will be commissioned next month,” said Sharanappa Yalal, Project Manager of the Pir Panchal Tunnel, executed by Hindustan Construction Company (HCC) Ltd. “They are waiting for approval from the Commissioner Railway Safety,” Yalal said.

 

Prime Minister Dr Manmohan Singh is scheduled to commission the tunnel on June 25. Opening of this tunnel, longest in India and third longest in Asia after Taihang Tunnel (28 km) and Wushaoling Tunnel (21 km) in China, would ease transportation problem to Kashmir especially during winter when snowy weather forces closure of Jammu-Srinagar Highway, sometimes for weeks together.

 

Built at the cost of Rs 1,300 crores, it would reduce distance between Banihal and Qazigund by 17 kms.

 

“More importantly, Kashmir will remain connected to outside world round the year,” Yalal said at his Banihal office. Presently, train operates only from Qazigund in South Kashmir to Baramulla in north.

 

The tunnel is part of the 345-km Udhampur-Srinagar-Baramulla rail project of the Northern Railways, which is scheduled for completion by 2018. Last December, the trail run of the tunnel, which runs 0.4 kilometers beneath the Jawahar Tunnel, was conducted smoothly and the train covered the 11 km distance from southern side of the mountain in Banihal to north in Qazigund in 6.6 minutes.

 

Its construction, which was scheduled for completion by 2009, was awarded to the HCC by IRCON in 2006 but the completion period overrun by three years. “The project is unique in India as the New Austrian Tunnelling Method (NATM) was used first time in mass capacity,” said an HCC official.

 

Aligned straight from north to south the tunnel is believed to be 100 per cent water-proof and is equipped with fire fighting system. It has a three meter wide concrete road running aside the track throughout its length for maintenance and emergency purpose.

 

However the engineering wonder has come at some cost to environment. Around 7.15 lakh cubic meters of earth excavated to dig the tunnel has been dumped in a nearby open filed.

 

“Once a tunnel is dug, it cuts the water aquifers resulting in sudden bleeding of water in and around the tunnel. The streams, springs and other sources of water located downstream face water depletion and ultimately dry up,” said a senior PHE official.

 

He said the “disaster” was visible at places where tunnels came up. “Besides various chemicals used for digging not only affects the water quality in tunnel area it also creates havoc at places where the excavated material is dumped. It has been seen that due to use of the chemicals the water color changes and it becomes unfit for drinking,” the official said. Yalal claimed they have given “due consideration” for conservation of environment. “We have properly maintained the dumping ground,” he said.

 

The project has helped the local economy. At least 60 percent of the manpower required in the project (both skilled and unskilled) were state subjects, the HCC official said.

 

Mushtaq Ahmad Hajam of Banihal is working as a security supervisor with the HCC at the project for past seven years.

 

“It has helped us economically and we are hopeful that Banihal will turn into tourist hub once the tunnel becomes operational,” said Mushtaq at main railway station at Kaskot, 1.5 kilometers from the tunnel.

 

The inauguration of Caspian Sea Eastern Rail Corridor in Astana a few days back added another element to the rising vision of Eurasia as a connected space for trade, communication and development. The rail road originally mooted by Iran, Kazakhstan and Turkmenistan holds high potential in not only linking Central Asia to Persian Gulf but also in linking Russia to India, China and Indian Ocean through Central Asia. The resource rich countries of Turkmenistan and Kazakhstan are landlocked, and the building of the rail road would bring better prospects of trade and development for those countries as well as for the whole region. The idea of North South corridor linking Russia’s south to India through the vast Eurasian landscape, consisting of the former Soviet Union and neighboring countries, has become an increasing possibility with the building of this road. Iran expressed jubilation at the opening of the road and hoped that the road will shorten the distance of trade between Central Asia and Iran, and will further extend the road link to other countries of the region.

 

While inaugurating the 146 kilometer rail road of the larger project of about 1000 kilometer road, the leaders of Kazakhstan and Turkmenistan made it clear that this rail road linking Kazakhstan, Turkmenistan and Iran is not the end of this connection process. Turkmen President, Gurbanguly Berdymukhamedov widened the joint ambition of linking the railroad “to such economic centers of global development as China, India and the Asia-Pacific.” Kazakh President, Nursultan Nazarbayev too harped on this broad agenda of making the whole Eurasian space well connected. He emphasized in his speech: “Today, when many countries are still overcoming the consequences of the financial crisis, we have managed to complete such a large-scale transport project.” Besides the rail road the two leaders also declared the launch of a fiber optic data line which would link “Kazakh networks with those of Afghanistan, Turkmenistan and Iran, and Turkmen networks with Russia, Eastern Europe and Asia via Kazakhstan.” One of the major hurdles against development, particularly in Central Asian region, is lack of connectivity. Though the region is historically traversed by the famed Silk Road with its famous centers like Samarkand and Bukhara, the region is comparatively less economically developed with trifle bilateral trade. For instance, the bilateral trade between Turkmenistan and Kazakhstan stands at about $345 million, not even one billion. Besides poor economic cooperation, the ethnic strife among some of the countries, and spill over effects from Afghanistan, and the rise of radical forces made this region laggard in economic development.

 

The signs, however, are propitious in the context of integration. Instead of building a grand Eurasian corridor, the trend so far has been building smaller linkages and then connecting all those linkages into a wider North South Eurasian Road, which can have components of concrete road as well as rail road, and at places it can be linked by sea. There are already attempts in this direction. Chinese involvement in building roads in Central Asia including in Uzbekistan and Kyrgyzstan, India’s involvement in building roads in Afghanistan can further the integration process. The roads in Central Asia can be further linked to Afghanistan, and towards India and Indian Ocean through Pakistan. In east west direction it can be stretched from the Persian Gulf through Iran to Pacific Ocean through Russia and China. In terms of trade in energy, there is already a pipeline operating between Turkmenistan and China via Uzbekistan and Kazakhstan since 2009. Pipelines like TAPI and IPI are also positive signs for this integration in the Eurasian space.

 

The Caspian railroad, built at the cost of $433 million, will help reduce both transaction and time costs from these two Central Asian countries to Iran, and it will give them access to Persian Gulf. Besides, it will increase trade between these three countries. One thing that needs mention is the Iranian involvement in this Eurasian project. Currently undergoing a huge geopolitical churning, the increasing Iranian involvement in Eurasia will enhance its geopolitical clout in the international stage. Iranian Minister of Road and Urbanization Ali Nikzad expressed satisfaction that the joint railway connecting national networks of Iran, Turkmenistan and Kazakhstan would promote energy, trade, economic, transportation and communications interactions in the region.

 

One of the ideas that Russia has harped on particularly after Vladimir Putin assuming the current presidency is the idea of Eurasian integration. The integration of Eurasia is not an infeasible proposition but a practicable reality. Whether it is Silk Road in the region or the ethnic or linguistic links within it, an integrated Eurasia has the potential to emerge as the largest economic zone in the world. Besides economic, other areas of focus of this integration process will be to tackle religious extremism and terrorism and drug trafficking.

 

 

 

 

 

 

As the metro is put into operation, here comes the International Garden Expo! The “International Garden Expo” metro trains developed by China CSR Sifang Co., Ltd. came into service on the west section of Line 14 of Beijing on May 5. The low carbon and environmental friendly A trains with the theme of “green garden” which are put into operation will serve the coming Beijing International Garden Expo.

 

It’s reported that this batch of metro trains is the first batch of A metro trains of Beijing with a maximum passenger capacity of up to 2,580 which is 700 more than Beijing’s currently running B trains.

 

Blue, green and yellow bodies as well as green and yellow seats of different shades allow passengers to experience fresh nature. The most important thing is that the trains possess outstanding low carbon and environmental friendly advantages. According to Yang Jihong, senior director designer of China CSR Sifang Co., Ltd., the trains, among all domestic A metro trains, adopt light weight, non-coating and stainless steel bodies for the first time with strong corrosion resistance and low operation maintenance cost. The train design takes full use of stainless steel and high strength features, optimizes structure design and makes A trains with stainless steel bodies equivalent to A trains with aluminum bodies in their weights. It not only meets the demand of great load but also achieves the best effect of energy-saving and emission reduction.

 

The safe reliability of the trains is worth praising. Europe’s latest technical standards are applied to the performances of the trains such as anticollision and body strength. The vertical static load of the body is 1.5 times greater than ordinary metro trains of China. The first compartment of the train is equipped with “anti-climbing and energy-absorbing device and energy-absorbing area”. Its largest impact resistance is 1.4 times greater than China’s B metro trains with better safety performance.

 

According to Yang Jihong, the trains combine train network control system of domestic independent intellectual property rights, air braking system and traction system of international advanced level, thus ensuring trains’ operation performance and best quality. The trains are equipped with all kinds of equipment such as security facilities, TV surveillance system, fire alarm system, internal and external emergency unlock and intercom alarm under critical situations. An emergency evacuation door is installed in the front end of the train. The slope escape tunnel enables passengers to evacuate within 30 minutes in case of emergency. The form of power supply with four grid-tied power units is adopted for the auxiliary power supply system of the train.

 

 

 

 

 

 

Few days ago, All China Federation of Trade Unions announced the result of 2013 National May 1st Labor Award, Medal and Founding Labor Vanguard assessment. China CSR Co., Ltd won National May 1st Labor Award; five people including Zheng Changhong, chairman of China CSR, won National May 1st Labor Medal; cabinet and workshop cabinet group 1 and another unit of CSR Zhuzhou Electric Locomotive Co., Ltd. Electrical Equipment Branch won the title of “National Founding Labor Vanguard”.

 

China CSR won National May 1st Labor Award in the Key Industry Energy-Saving and Emission Reduction Standard Competition. China CSR is committed to providing green and low carbon rail transit equipment and other large equipment for the world. In 2012, the test train with a speed of 500km/h produced by the company made the highest speed record of 605km/h in the domestic laboratory. The company fully uses its advantage of “Railway Industry Energy-Saving Inspection Center” and makes great efforts to do a good job in energy-saving and emission reduction with good effects being achieved. Compared with the base period of 2010, the general energy consumption for the output value per 1,000 yuan has decreased by 3.99% in 2012 and the general energy consumption for the added value per 1,000 yuan has been reduced by 16.22%.

 

Under the leadership of Zheng Changhong, chairman of China CSR, China CSR cadre team, united with its 90,000 employees, has precisely grasped the changes and development trends of the rail transit market, further conducted scientific outlook on development and realized rapid development and historical leap of China CSR. Zheng Changhong organized and implemented lean production and management improvement, promoted transformation and upgrading of the company, and seized the best opportunity in the market development. At present, the labor productivity of some China CSR core enterprises is 1.5 times greater than the per capita labor productivity of American manufacturing industry. The operating revenues of China CSR Group in recent three years are respectively RMB 66.8 billion, RMB 82.6 billion and RMB 93 billion with a compound growth rate of 18%.

 

Other individuals of China CSR who won National May 1st Labor Medal are Wang Yanhua of CSR Qishuyan Locomotive Co., Ltd, Li Qiong of CSR Zhuzhou Electric Locomotive Co., Ltd., Yi Ran of CSR Yangtze Co., Ltd and Guo Youdong of Puzhen Company; Power and Electronics Business Division of CSR Times Electric Co., Ltd, CSR Zhuzhou Electric Locomotive Research Institute Co. Ltd., also won the title of National Founding Labor Vanguard.

 

 

 

 

 

A top transportation official said today that the United States must remain dedicated to building high-speed rail systems to confront pollution, population increases and competition from rest of the world.

 

Ron Diridon, chairman of the U.S. High Speed Rail Association's advisory board in Washington, D.C., said that California in particular is faced with a population that will hit 65 million in 2060 and so has to develop new, clean mass transit systems.

 

"We can't expand our freeways anymore," Diridon told a meeting of the San Jose Rotary Club in downtown San Jose. "We can't double deck them. We can't expand our feeder streets."

 

"We just can't do it on single-passenger vehicles," he said. "If we don't have mass transportation, we don't have a Silicon Valley." Construction on California's planned $68.5 billion high-speed rail system starts this summer with a $990 million phase stretching from Merced in the Central Valley to Fresno, Diridon said.

 

He described the state's planned 790-mile rail route, with 26 stations, as "the largest construction project in the nation's history."

 

Future phases will go north from San Diego to Irvine, Los Angeles and Palmdale and eventually Gilroy, San Jose, San Francisco and then Sacramento by 2029 without crossing any roadways, he said. The high-speed line, reaching speeds of about 200 mph, would be integrated so that passengers could use existing mass transit venues such as Caltrain, BART and Santa Clara Valley Transportation Authority's light rail trains and buses, Diridon said.

 

The combination of transit systems would make it possible for someone in Fresno on their way to Paris to check their bags on the high speed train, reach San Jose in 51 minutes, take a shuttle to Mineta San Jose International Airport and later pick up their bags at customs in France, he said.

 

"That's the international or national trip of the future, that our airport, because we plan carefully for it, will be able to accommodate," Diridon said.

 

Diridon, former head of the Mineta Transportation Institute at San Jose State University, said that California and 32 other states are working on high-speed systems, but the United States still has to catch up with the rest of the world.

 

Japan has had a 200 mph train system since 1964, Germany, Italy and Taiwan have 200 mph systems in place, France has a 357-mph train and China, with the world's longest rail system, has train cars traveling at 230 mph. Europe will have a massive set of speedy trains from Scandinavia to Turkey and Moscow to Madrid by 2020, he said. The United States will find those countries "tough to compete with" because they will be able to get more of their workers faster to markets and businesses at greater distances, Diridon said.

 

Diridon said that greenhouse gases from fossil fuel-based vehicles have contributed to global warming trends that have melted mountain snow.

 

The effect of that pollution one day may bring a worldwide shortage of water unless something is done to reduce it, he said. Some foreign officials he met overseas blamed the United States for causing 30 percent of the world's greenhouse gases despite having only 4 percent of the world's population, Diridon said.

 

A government minister from China once told him that the size of snow packs in the country's Himalayan mountains have fallen 20 to 50 percent since 1950, reducing its water supply. Diridon said he is worried that to survive with its huge population, China might have to start buying up private stocks of water in the United States.

 

"When we run out of water, then we are coming after yours," Diridon said the minister told him.

 

"The rest of the world is frantic about this issue," Diridon said. "They are not happy with the United States."

 

Political attitudes among American leaders have shifted, even in conservative states that at first rejected spending billions on the high-speed rail, he said.

 

"It's not a partisan issue," he said. "It's a jobs issue. It's an environment issue." Though run using electricity generated by the burning of fossil fuels, high-speed rail ends up sending greenhouse gases into the atmosphere at far lower levels per person than airlines and cars, he said.

 

"High speed rail is the best in the world in terms of pollution," Diridon said. "That's why I want high speed rail for America."

 

 

 

 

 

 

 

 

UK-based Darwin Investment Managers has built up its exposure to railways in its portfolio, and explains the rationale behind such an approach in the latest “Perspectives” report.

 

The first and second largest equity positions in Darwin’s portfolio are US railway company Kansas City Southern and West Japan Railway, respectively. The remaining exposure is through Japan’s largest rail operator, East Japan Railway, and manager and operator of the Channel Tunnel, Eurotunnel, bringing total exposure in the portfolio to just under 5 per cent.

 

Such railway investments have been structured so as to minimise risk and maximise exposure, said the firm. That they have high capital costs but low energy costs, relative to other transport stocks, suggests these investments would benefit from a world where energy costs will move higher in the long term, which the firm sees as a probable scenario.

 

Similarly, Darwin stresses the investments’ common characteristics which are particularly favourable, such as high fixed asset bases with long-term funding structures, captive and growing customer bases, and revenue lines sensitive to inflation and economic growth. These are particularly appealing features considering moves by central banks to pump money into the system to create inflation and economic growth in a world of low funding costs, said the firm.

 

But how the investments differ is their individual contributions to total portfolio risk. Eurotunnel is the largest contributor to risk, which is mainly a reflection of its high volatility profile and this drives the decision to keep the weighting small. Likewise Kansas City Southern contributes meaningfully to risk, although this is a function of its higher weighting as well as a medium to high volatility profile.

 

In contrast, the two Japanese positions behave as diversifiers of risk in that they detract from the contribution to total portfolio risk. Their correlation with the rest of the portfolio is therefore limited and their volatility profiles are low.

 

Such differing stock-specific characteristics between each investment is what allows Darwin to build a larger position in the portfolio, without distorting risk, concluded the firm.