The country's state-owned railway company will spend more than 50 billion yuan (HK$63 billion) in its first large-scale train purchases to meet rising transport demand even as the economy slows, Xinhua reported.

 

Newly formed China Railway Corp, which took over train operations from the dismantled Ministry of Railways in March, will buy locomotives, bullet trains and rolling stock, the news agency said yesterday, citing the company.

 

The orders come after the government pledged last month to speed up rail investment, especially in the central and western regions, to promote urbanisation and help boost economy. The purchases will benefit CSR and China CNR, the country's two biggest train makers, according to BOC International.

 

"The long-awaited tender is definitely good news to the two train makers," Xu Minle, a Shanghai-based analyst at the bank, said before the announcement, referring to the tender for bullet trains. "But the train makers' share prices may have already factored this in."

 

The call for tenders for bullet trains, which Xinhua said the company would make soon, will end a hiatus in place since a 2011 high-speed train crash near Wenzhou that killed 40 people.

 

Cargo delivery by train reversed declines last month, rising by 6.46 million tonnes from a year earlier to 260 million tonnes, despite an economic slowdown, according to Xinhua.

 

The government will add 5,500 kilometres of new track this year, bringing the total to more than 100,000km.

 

Beijing split the Ministry of Railways into two in March as the new leaders sought to pare bureaucracy and eliminate graft in a department that had more than 2 million employees and 2.8 trillion yuan in debt.

 

 

 

 

 

Russian mining and steelmaking company Mechel said Tuesday it has started shipping washed coking coal to China by rail via the Makhalino (Russia)-Hunchun (China) crossing point, part of the Trans-Siberian Railway.

 

This railway checkpoint, the 59th in Russia but only second connecting the country's far east with China, has just resumed shipping after it had been shut for almost 10 years since 2004, Russian Railways said.

 

The first 30-truck train with coal from Yakutugol, Mechel's miner in Russia's far eastern republic of Sakha (Yakutia), departed to Chinese buyers in early August to travel along the international transport corridor, through Makhalino-Hunchun, linking the south of the Primorye region in Russia's Far East with the Jilin Province in north-east China.

 

Last year, Mechel's coking coal exports from its Russian mines totaled 5.8 million mt and until now, all its shipments to China went through sea ports. The opening of this railroad route will allow the company to diversify its logistics and shorten delivery times to China, Mechel commented in a statement.

 

 

 

 

 

 

CHINA – GERMANY – RUSSIA – EUROPE – The chance to provide true intermodal services between China and Europe took a step forward recently with DB Schenker acting as the logistics partner for the city of Zhengzhou to organise the first freight train journey from the north-central Chinese city to Hamburg. The trip, organised by the Zhengzhou International Land Port Development and Construction Company, saw the train, complete with fifty one containers, arrive at the freight terminal in Hamburg-Billwerder last Friday.

 

The train from Zhengzhou covered the 10,214 kilometre route through China, Kazakhstan, Russia, Belarus and Poland to Germany in a record time of just 15 days, with DB Schenker acting as logistics partner to Zhengzhou for all services outside China. The freight group was particularly pleased with the demonstration of such a short transit time from inland China to the distribution of the containers, causing Dr. Rüdiger Grube, Chairman of the Management Board of Deutsche Bahn AG, to comment:

 

"The growing Chinese goods traffic, together with the ongoing shift from production-intensive industries to the Chinese hinterland, offers a lot of potential. DB Schenker in Asia is in an excellent starting position."

 

Schenker of course has worked in the region for decades, with the first containers on the Trans-Siberian route forty years ago and services to Beijing starting five years ago, followed by the regular block train service between China and Germany set up mainly for the automotive and electronics industry; in the past two years, more than 300 freight trains were sent to and from China. Zhengzhou, the capital of Henan province, has nearly nine million inhabitants and is considered as an important industrial centre and transportation hub and an obvious target for service expansion.

 

Meanwhile the hundred kilometres of track between Primorsky Krai, Makhalino a Russian station on the Ussuriysk–Khasan–North Korean border line and China’s Hunchun, Yanbian, in the province of Jilin, has finally reopened after closing in 2004 according to local press. The railway was designed to carry coal and timber and opened in 2000 with projections that it would see three million tonnes of cross border freight annually. In the four years it was open it is reported that only around 50,000 tonnes of cargo actually moved on the rails.

 

A dispute then apparently arose, allegedly over costs and charges between the joint shareholders, Russia’s Golden Link and China’s Northeast Asia Railway Group with 20% of the line in Russian hands and the balance held by the Chinese, and the line closed and reopened before closing again with forecasts it would reopen in 2011. Now apparently common sense has prevailed and the line is once again open for business with the first train load of coal delivered last Friday.

 

 

  

 

So who can fault me for saying that MTRC stands for Modern Town Redevelopment Company when our metro system's finance man, Lincoln Leong, himself pushes this line?

 

You have to expect it. Every time the MTR finishes a new project, with ribbon-cutting speeches made and the champagne drunk, the boys all clap each other on the back and say: "Wow, that was fun. Let's do it again."

 

But there is no immediate prospect of doing it again once the South Island line is finished. Only short spur lines in already built-up areas are left on the plans, along with lines that the company will operate but is not building. Tut, tut, tut, how sad, all that rail and property model experience going to waste.

 

It is just as well. The rail and property model was never anything but a delusion to which only Hong Kong bureaucrats could be subject. It traded on the odd notion that you cannot assign a value to property until you actually dispose of it.

 

Thus if you give the MTR the land above its stations, these sites suddenly and magically acquire value and the proceeds cover the cost of building the railway lines. Ain't magic wonderful? We got the MTR for free.

 

Did it ever occur to our mandarins that development land is the most valuable treasure in our public purse and that they might raise even more money if they sold these sites at auction? To my mind, there never was one of those "win-win situations" of which they talk so much, but just a convoluted way of doing things when a simpler way would have done.

 

It got even sillier at times. When Donald de Bowtied, as financial secretary, decided to float the MTR on the stock market, he said he could value it at HK$100 billion because that was how much had gone into building the network at the time.

 

The investment bankers soon told him otherwise. The fares had been set so low that profits would allow a valuation of only HK$25 billion at best. Donald's solution: Take a big piece of reclaimed mud at Yau Ma Tei, lift all building restrictions, and pass it on to Sun Hung Kai Properties as an MTR joint venture.

 

Donald swiftly got his HK$100 billion and we got that grim fortress ring of blocks, which so darkly overhangs what is now to be the West Kowloon Cultural Centre. Saved face trumps sound finance.

 

The rail-property model has other faults. It inevitably favours rail construction above new development areas, where there is plenty of available land and none quite so valuable as right over the rail station that provides the primary transport link.

 

But it is not quite so suited to already densely developed areas that, in other cities, may be most in need of a metro system. It also distinctly disfavours the creation of hubs. The first rail line to the hub gets the station land and the builders of the next line then argue for another hub for themselves.

 

Put another way, the rail-property model sufficed for a high-growth period of Hong Kong's history, while this city was expanding rapidly. These conditions may not obtain in the future and they certainly do not obtain in many cities to which the MTR may want to apply them. This is a Hong Kong model. It does not necessarily ship well.

 

Most of all, I can picture the raised eyebrows of city officials on the mainland who are first told by Mr Leong that he has a cost-free way of building them a metro and then tells them what it involves.

 

Does he really expect them to be ignorant of the commercial value of their prime inner city developments sites? Does he really think them so backward that, as he claims: "On the mainland, most of the space above railway stations and depots is empty because it is not easy to put up a building without expertise and know-how."

 

I rather think that this sort of condescension will cost him dear.

 

 

 

 

TATA Steel has been awarded a contract to supply 60,000 tonnes of rail for the 444km Haramain high-speed line between Mecca, Jeddah, and Medina, which is currently under construction.

 

Steel for the rails will be produced at Tata's Scunthorpe plant in Britain before being rolled into 25m lengths at the company's Hayange mill in eastern France, which is currently being upgraded to produce longer heat-treated rails. Production of rails for the Saudi order will begin at the end of the year and is expected to continue throughout 2014.

 

The rails will have to withstand extreme desert conditions, with violent sand storms, drifting sand, and ambient temperatures ranging from freezing to 50oC.

 

The line is due to open in late 2014 or early 2015 and is expected to carry around 160,000 passengers per day, with ridership increasing further during the annual Hajj pilgrimage.

 

 

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China-Pakistan Economic Corridor (CPEC), a network of road and rail links starting from China’s Xinjiang to Pakistan’s Gwadar port, will transform Pakistan into a hub of trade and commerce as this project envisages establishing several economic zones and physical links connecting Pakistan and China as well the region.

 

Pakistan-China Institute in collaboration with China Institute of International Studies (CIIS) held a symposium in Beijing, which was attended by leading scholars and experts on China-Pakistan relations.

 

Pakistan’s Ambassador to China Masood Khalid was prominent guest of the seminar, according to message received from China.

 

Pakistan-China Institute Chairman Senator Mushahid Hussain Sayed, who led Pakistani delegation, highlighted the geo-strategic situation and emphasised China is a driving force of the Asian century adding that CPEC will initiate a new of era of strategic cooperative partnership between Pakistan and China. The road and rail links will further strengthen the existing bond of brotherhood.

 

Speaking on this occasion, CIIS Vice President Dong Manyuan said CPEC from Kashgar to Gwadar will integrate the economies of the two friendly countries.

 

Khalid said CPEC will transform Pakistan into a hub of trade and commerce as this project envisages establishing several economic zones and physical links connecting Pakistan and China as well as the region.

 

He further added that in this regard, a task force and secretariat has been established while team of Pakistan will visit China soon for further discussion on this project.

 

The ambassador said CPEC is both a long-term and short strategic plan of China and Pakistan envisaged by Chinese Premier Li Keqiang. CPEC is a mega project with a cluster of industrial parks and economic zones, he noted.

 

He further added that visit of Chinese premier to Pakistan and reciprocating visit by Pakistani prime minister in July 2013 shows the interest and strong political will of the two governments to implement this strategic project.

 

Lin Dajian from NDRC highlighted the security issues and challenges that could impede the speed of project. She also added that the project would help bring investment and boost trade and commerce not only in China and Pakistan but also in the region.

 

Other scholars also highlighted the various aspects of CPEC from the vision to political will, from feasibility to implementation, from opportunities to challenges. The participants were of the view that CPEC can benefit new emerging regional cooperation in greater South Asia driven primarily by economy and energy, and building of pipelines and ports with roads rail infrastructure, all which can transform the lives and future of the region.

 

 

 

UKRAINIAN Railways (UZ) has selected Premier Leasing as its leasing partner for 350 new electric freight locomotives, which are being procured from three suppliers at a total cost of Hryvnia 22.1bn ($US 2.8bn).

 

The deal concerns 50 2ES10 twin-unit 3kV dc locomotives from Ural Locomotives, the Russian joint venture of Siemens and Sinara; 230 3kV dc 2ES4ks from Novocherkassk Electric Locomotive Plant (NVEZ), Russia; and 70 25kV ac 2EL5 locomotives from Luganskteplovoz, the Ukrainian subsidiary of Transmashholding.

 

According to UZ, Premier Leasing made the best offer with a lease rate of 9.5% per year. The other bidders were OTP Leasing and Allianz Leasing.

 

The delivery of the new locomotives will allow UZ to withdraw its fleet of VL8 and VL8M units, which were built between 1955 and 1968.

 

THE Indian government kicked off a programme of financial reforms for Indian Railways (IR) on August 1, when the cabinet approved proposals to establish an independent Rail Tariff Regulatory Authority (RTA).

 

Over the last decade passenger fares have largely remained unchanged, with freight revenues being used to cross-subsidise fares. As a result, losses from passenger operations have mounted and are expected to reach Rs 250bn ($US 4.7bn) in the current financial year - a four-fold increase over the figure of Rs 61.6bn in 2004-05.

 

In contrast, IR revenues increased by an average of 10.6% per year during the same six-year period.

 

"The populism and short-sightedness of past railways ministers have destroyed rail finances," an official said. "There is no money to fund capacity building schemes."

 

Minister of state for railways Mr Adhir Ranjan Chowdhury conceded in a written answer in parliament recently that more than 300 capacity enhancement projects are still pending.

 

The five-member RTA – comprising a chairman and four other members – is expected to tackle the distortions between IR's freight and passenger activities by disconnecting the process of passenger fare increases from political decision making and bring it into line with the realities of the market. In the early stages of this process a Fuel Adjustment Component (FAC) is likely to be added to passenger fares. Passenger fares are likely to be adjusted at periodic intervals based on the FAC calculations.

 

Initially RTA will have limited powers, acting only as a recommendatory authority. This means that the final decision to raise passenger fares will remain in the hands of political leaders, at least in the short-term.

 

Nonetheless, the decision to establish the RTA is considered a major step forward in reforming the railway's finances. "The setting up of the RTA is itself a big step as politicians will find it extremely difficult to overrule its recommendations," an official explains.

 

Later this month, an executive order is expected to be issued which will enable the RTA to be established with immediate effect. At the same time, a legislation seeking to amend the Railways Act of 1989 will be introduced in parliament with the aim of providing legislative sanction to the RTA.

 

The RTA concept has been under discussion for several years and was formally proposed in January 2011. It was also mentioned in this year's railways budget, which was published in February.

 

 

 

 

 

 

TURKISH Prime Minister Mr Recep Tayyip Erdogan formally launched test operation of the Marmaray link between the Asian and European sides of Istanbul on August 5, when he took the driver's seat for a historic first trip beneath the Bosphorus.

 

The journey through the 13.3km tunnel between Üsküdar on the Asian side and Sirkeci on the European side took just six minutes, and marks a milestone in the Lira 9.2bn ($US 4.8bn) project. The tunnel is world's deepest immersed tube tunnel, constructed at depths of up to 60m below sea level.

 

The line will be inaugurated on October 29, the 90th anniversary of the founding of the Turkish Republic, and shuttle services will initially operate between Kazilicesme and Üsküdar until the rest of the project is completed. The line will ultimately run for 76.3km from Halkali in the west to Gebze in the east, reducing the journey time from 1h 45min (by train and ferry) to 1h 4min.

 

The Marmaray line is expected to carry 1.5 million passengers per day by 2015.

 

 

 

 

 

 

INFRASTRUCTURE Leasing and Financial Services Rail (IF&LS), the Indian company which holds the PPP concession to build the metro in Gurgaon south of Delhi, has awarded Siemens a turnkey contract worth around Rs 5.65bn ($US 92m) to supply signalling, electrification, and rolling stock for the second phase of the network.

 

The initial 5.1km section of the metro is expected to open in September will run north from an interchange with the Delhi Metro Yellow Line station at Sikanderpur, looping round to serve Gateway Towers and Moulsari Avenue. The second phase runs south for 7km from Sikanderpur following the route of Golf Course Road to Sector 55-56 with six new stations.

 

Siemens will supply its Sicas ECC type electronic interlocking, LZB 700M automatic train control with ATP/ATO, and its Vicos OC 501 ATS system. The minimum headway will be 120 seconds, giving the line capacity to carry 30,000 passengers per direction per hour.

 

Third rail 750V dc electrification will be installed and power will be supplied to the extension from the 66kV grid. A medium-voltage ring will supply 11kV ac power to four substations, six metro stations, and the depot.

 

Siemens will supply seven three-car trains for the extension, which will supplement the existing fleet of five trains. Each train will accommodate up to 760 passengers.

 

The second phase is due to open by the end of 2015. In the longer term, a further extension towards Udyog Vihar in the north is proposed which will take the total length of the network to almost 20km.

 

 

 

 

 

FOLLOWING an international tender, Saudi Railways Company (SAR) has awarded Italferr, the engineering subsidiary of Italian State Railways (FS), a €28m contract to design the Landbridge, Saudi Arabia's first rail link between the Red Sea and the Persian Gulf.

 

The 14-month contract covers both the preliminary and detailed design phases, and includes track and structures, stations, freight facilities, signalling (ETCS Level 2) and telecommunications, and an environmental impact study. It also encompasses studies on noise mitigation and managing the impact of the harsh desert environment on the railway.

 

The contract was signed by the Saudi Public Investment Fund (PIF), the Ministry of Finance, and SAR. Italferr will be assisted by Arabian Consulting Engineering Centre (ACEC), a Saudi engineering company established in 1979.

 

The Landbridge will consist of a 950km line from Jeddah to As Suq and Riyadh, with a 115km link between the Gulf ports of Dammam and Jubail. Trains will use the existing Saudi Railways Organisation (SRO) line between Riyadh and Dammam, which will be upgraded to accommodate increased levels of traffic. Transit times between Jeddah and Dammam will be around 18 hours, compared with the current sea voyage of 5-7 days, and the line is expected to carry around 8 million tonnes of freight per year. Passenger trains will operate at up to 220km/h with a Jeddah - Riyadh journey time of around six hours. The bus journey between the two cities currently takes 10-12 hours.

 

 

 

 

 

 

 

 

THE first freight train from Zhengzhou in eastern China to the Billwerder intermodal terminal in Hamburg arrived at its destination on August 2, just 15 days after setting off on its 10,214km journey.

 

The inaugural trip was arranged by Zhengzhou International Land Port Development and Construction Company with the cooperation of DB Schenker. The 51 containers were transferred to 1520mm-gauge wagons at Alashankou on the China-Kazakhstan border, continuing through Russia before being transhipped back to standard-gauge wagons at the Belarusian – Polish frontier.

 

A return service is due to depart from Billwerder on August 14, and DB Schenker hopes to begin operating a regular weekly block train on the route by the end of the year.

 

DB Schenker says that it has been involved in the operation of more than 300 trains between Germany and China over the last three years. Regular weekly block services already run from Chongqing to Duisburg and from Leipzig to Shenyang, which serve customers in the electronics and automotive industries. These trains run on a more northerly route via the Trans-Siberian Railway.