From Indian Ocean to Uganda: China will build Kenya's new rail line

More than a century ago, British engineers and their indentured African and Indian laborers spent five years carving a railroad through what would become Kenya, in a bid to open up East Africa’s interior to trade.


Along the way, close to 2,500 workers died, struck down by malaria, attacked by man-eating lions, or overcome by exhaustion.


By the time the 660-mile track reached the shores of Lake Victoria in 1901, the massively over-budget endeavor had earned the nickname “the lunatic express.”


In Beijing Monday, a deal was struck to bring Chinese railway builders to try the project all over again, constructing a new track from Kenya’s Indian Ocean coast to its western border with Uganda. And as before, the aim is to boost business.



Fast transport demand boosts railway equipment market

With the rapid development of railway, China's railway equipment market is seeing new development opportunities and vast prospects.


After two years of silence, bidding for MU trains has been restarted. Recently, China Railway Corporate convened a meeting to study and decide the bidding, which will include MU trains, passenger trains, locomotives, cargo trains. The total bidding amount this year is estimated to be around RMB 100 billion yuan.


It is learned that China Railway Corporation has started the purchase of locomotives, MU trains, passenger trains, and cargo trains based on new increase of operation mileage and passenger and cargo transport this year. The total purchase volume is more than RMB 50 billion yuan, and MU train bidding will not exceed 50 percent of the total amount, concentrating mainly on highly cold-resistant trains operating in the Northeast. This is the first restart of MU train bidding since the "7.23" Ningbo-Yongzhou railway accident that has resulted in great loss.


In 2011 and 2012, there were several railway equipment biddings for cargo trains, passenger trains, and locomotives, but MU train bidding had been suspended. Compared to cargo train, passenger train, urban subway train, or locomotive those unit prices range from tens of thousands of RMB to tens of millions of RMB, MU train, whose unit price generally exceeds RMB 100 million yuan, can be more efficient to boost the development of equipment manufacturers and related industries.


According to experts, the restart of MU train bidding indicates that the problem of railway construction fund has been solved and that railway is once again on the track of rapid development.


The 2013 National Railway Work Meeting proposed RMB 650 billion yuan of railway fixed asset investment this year. Of this, RMB 130 billion yuan is for the purchase of vehicles and updating and renovation, increasing by 14 percent year on year. After adjustment, the annual budget of fixed investment this year is RMB 660 billion Yuan, RMB 530 billion Yuan of which will be invested in infrastructure construction. This means that the extent of vehicle purchase and updating and renovation would increase.



High-speed rail is at the foundation of China’s growth strategy

Has China overinvested in high speed rail? Anecdotal stories of empty train stations (paywall) in far-off provinces have led some to conclude that high-speed rail is just another Chinese white elephant—an investment without a cause. But the recent experience with high-speed rail belies this narrative, and a closer look at the data reveals that high-speed rail has been, and is set to be, a vital part of China’s growth strategy.


Passenger rail has grown very quickly over the past decade. As seen above, from 2001 to 2011, national passenger turnover doubled. Yet this rise in demand has not been accompanied by a comparable increase in the length of railroad track. As a result, each kilometer of rail is now supporting more passengers. In other words, rail utilization has become more intense. In 2001, the average kilometer of rail supported 680 km (422 miles) of passenger travel. By 2011, this rose to 1,030 km, a 50% increase. This phenomenon has been going on across the country—particularly in the inland provinces. During the same time period, rail intensity in the frontier province of Qinhai increased by a factor of 2.5. In no other period of Chinese history has passenger rail demand been this strong.


In this context, high-speed rail has become important by enabling a more intense utilization of existing railways. When too many trains take too much time traveling the same length of track, they can get in one another’s way. But high-speed rail gets around this issue by reducing the amount of time any single trip takes. For example, the July 1, 2012 opening of the Yichang-Wuhan high-speed rail line cut travel time between the two cities from around four hours to only two. The recent Guangdong-Beijing line has also cut travel between the two cities from 20 hours to just eight.


This has occurred across the country, and as a result, high-speed rail has allowed more trains to be placed on the same length of tracks without overcrowding.


High-speed rail isn’t short of passengers either. Back in 2011, Tsinghua University professor Patrick Chovanec penned an editorial arguing that high-speed rail would be too expensive for most Chinese citizens to use, and therefore, would not have enough riders to sustain itself. But just one year later, average daily ridership on the high-speed rail network has hit 1.33 million daily passengers—more than one-fourth of the total number of passengers on the rail system.


The customer reaction to the previously discussed Yichang-Wuhan rail line has been especially positive. The July 1 opening was first announced on a government website on June 25 at 10 p.m. That night, the train station received calls asking about tickets from more than 50,000 people. The news about the opening also led a blogger in Yichang to exclaim: “Two hours from Yichang to Wuhan! A trip that I never dared to imagine has now become reality—truly a blessing for the masses.” Subsequently, during this year’s three-day summer boat festival, the Yichang train station saw a staggering 72,000 passengers pass through, up 71% from a year earlier.


Given that inland Hubei, a relatively poor farming province, has benefited from such an enthused ridership base, this bodes well for expansion in other parts of the country.


The above data and anecdotes show that high-speed rail is a justified investment, if only based on current conditions. But it still ignores a much bigger issue: the importance of high-speed rail to China’s future development strategy.


First, for China to continue growing, it must work on raising the income levels of the inland provinces.


So as more Chinese manufacturing moves inland, efficient freight transport will become even more necessary. Otherwise, the factories will be cut off from the coastal markets, and therefore will miss the opportunity to become as competitive as Guangdong and other coastal provinces were 10 years prior. As discussed above, high-speed rail reduces the time passenger trains spend on the railways, and therefore open up more room for freight trains. This is good timing, as freight demand is likely to only increase as more goods need to be shipped from inland China to be sold and more coal needs to be shipped across the country to satisfy rising energy demand. Thus, by strengthening the freight transport system, high-speed rail raises growth in rich and poor provinces alike.


Second, by making travel between large cities more economical, high-speed rail builds a foundation for service industries. Since high-speed rail dramatically cuts down travel times, many trips that used to be overnight now can be done in a day. While this may not be as important for the average tourist, this can be indispensable for client meetings in the business world. Without this, many high value added service industries, such as consulting or finance, would not be as strong.


Third, by making travel and tourism cheaper for middle class Chinese families, high-speed rail can actually help China rebalance towards consumption. According to estimates from the World Travel and Tourism Council, the tourism industry makes up 10% of employment in China, and its direct and indirect effects add up to around 14% of China’s GDP (pdf). Since tourism depends on cheap travel, high-speed rail could play a pivotal role in fostering this industry.


And indeed it has. During this year’s spring festival, the opening of the Beijing-Guangdong line caused an explosion in long distance travel packages for Beijing, with a major tourism company reporting a 50% year-over-year growth in this category. It is further forecast that the opening of this new line will result in an over 20% increase in Beijing tourism by the year’s end.


By making travel much cheaper, high-speed rail can encourage more tourism and consumption growth.


Fourth, if China is to avoid an environmental catastrophe, it needs to start developing energy-efficient forms of transport right now, and high-speed rail certainly fits the bill. As a recent Economist has documented, China is experiencing never-before-seen levels of air pollution. And given that China has a population of 1.34 billion people, it cannot afford to have intercity transportation be based on automobiles. There is not enough space—both physically and environmentally—for China to expand on that path. High-speed rail also competes with Chinese airlines. As CNN has documented, high-speed rail has become a very attractive option against a backdrop of worsening airport congestion. Because air travel is one of the most carbon intensive forms of transport, any substitution away from air to rail reduces the Chinese carbon footprint. Therefore, besides being a prudent investment in economic growth, high-speed rail is also a necessary investment in preserving China’s environment.


This is not to say there is nothing to criticize about China’s high-speed rail development. The procurement procedures for Chinese rail cars are notoriously corrupt. Caixin has found stories of “sink tops that cost 26,000 yuan each, [and] 11,280 yuan for a water valve.” But the Chinese government is slowly improving on this matter of financing. While not directly related to high speed rail, the recent invitation for foreign bids to improve Chinese infrastructure represents a step in the direction of more efficient infrastructure construction. By declaring an intention to put private firms on the same level as state-owned firms in the bidding process, this is a sign that the Chinese government is slowly improving on its state driven model. Unlike the past decade of “the state advancing, the private sector retreats” (guo jin min tui), future Chinese rail development can advance alongside the private sector, thereby reducing risks of corruption.


But even if difficulties should arise, they should be put in the proper context. Any complex system will occasionally fail. As a Chinese blogger writes, the proper response in this situation is to “discover problems, face the problems, and then solve the problems.” This is normal and one does not need to condemn the entire system at the first sign of trouble, nor let the first sign of pessimism derail an entire growth story. Even if there are risks, the rewards are far greater. To channel the words of the late US president John F. Kennedy, China must invest in high-speed rail not because it is easy, but because it is hard—and because it represents a critical next step in China’s march toward development.



Chinese premier stresses rail construction in west

LANZHOU, Aug. 20 (Xinhua) -- Premier Li Keqiang stressed the importance of railway construction to promote development in China's western regions during a three-day visit to Gansu Province.


Railway construction in western China is important for transferring industry from the country's eastern regions to western areas, which will boost employment, relieve poverty, and solve uneven regional development, Li said.


Efforts should be made to ensure the quality of railway projects and construction workers' safety, Li said during a tour to Gansu in northwest China from Aug. 17 to 19.


China has vowed to invest a total of 660 billion yuan (106.45 billion U.S. dollars) in railway construction this year and plans to bring the country's operating railway network to more than 100,000 kilometers by the end of the year.


Li urged local governments and relevant departments to better implement the central government's policies, which are designed to stabilize growth, readjust growth patterns, promote reforms and improve livelihoods.


Local governments should provide more support to small businesses, which Li said are the engine of China's job growth.



Pak-China rail link to boost tourism

ISLAMABAD - The modern road and rail link between Pakistan and China will not only boost trade and industrial activity in the region but also promote tourism in the country, especially in Gilgit-Baltistan, Khyber Pakhtunkhwa and coastal areas of Makran.


The two countries have recently agreed to establish an economic corridor between Kashgar, China, and Gwadar, Pakistan. The $18 billion joint venture will include road and rail links passing through the mighty Karakorum and Himalayas in the northern Pakistan.


Elaborating the importance of this link for boosting fragile tourism industry in the country, President Sustainable Tourism Foundation Aftab Rana told APP that the road and rail route would pass through the most spectacular mountain ranges, which housed renowned high mountain peaks, glaciers and beautiful valleys.


He said the improved accessibility through the modern road and rail network large number of tourists from across the globe,especially from China, which already had a number one position in the outbound tourism market in the world with over 70 million Chinese travelling abroad each year. Aftab Rana said the rail route along the Karakorum Highway has great potential to become one of the top 10 rail journeys in the world because of the incredible landscape value of the region.


Similarly the railway link between Kashgar and Gwadar passing through the mighty Karakuram will definitely attract millions of tourists, foreign as well as domestic, he added.


He ephasasized that while planning this rail link, the government should pay special attention to developing areas along the route with the tourism point of view.


“With the development of tourism industry due to the rail link, other businesses such as hotels, restaurants, transport, handicrafts, shopping malls, local recreational resorts and local entrepreneurs will also get boost with thousands of new jobs and income generating opportunities for common people,” he said.


He suggested that the tourist destinations in Gilgit-Baltistan should be specially focused in the near future.


This railway network will not only play a key role in the economic uplift of the country but will also open doors of prosperity for the people of remote mountainous areas, he added.



China’s rail reform aims to compete with air and road transport

As a result of logistics providers increasing their offering of rail services from China to Europe, the country is working to reform its domestic rail freight services with the aim of increasing the availability and cost effectiveness of intermodal service options.



Wagon suppliers sign cooperation deal

UNION Wagon Company (UWC), Russia, has signed an agreement with Amsted Rail, United States, which will see the creation of a new joint venture for designing and manufacturing freight wagon components.


As part of the deal, UWC has been granted full intellectual property rights to Amsted's Motion Control 18-9836 bogie. Amsted says the 25-tonne axleload bogie has been adapted to accommodate 1520mm-gauge wheelsets, making it suitable for use in the CIS region.


Amsted says it will continue to work directly with its existing Russian customers, while UWC will have the authority to issue new licenses to produce the Motion Control bogie to other manufacturers of 1520mm-gauge vehicles.


UWC was established in 2012 and is the parent company of the Tikhvin wagon plant and wagon leasing company, Rail1520.

CSR rolls out first electric locomotive for Transnet

CSR Zhuzhou Electric Locomotive, China, has unveiled the first of 95 Class 20E dual-voltage electric locomotives for Transnet Freight Rail (TFR), South Africa, which were ordered last October from the CSR E-loco Supply consortium at a cost of Rand 2.6bn ($US 298m).


The first two locomotives will be shipped to South Africa by the end of next month, and a further eight units will be built in China before production transfers to South Africa.


The 3MW Class 20E is equipped for operation on 25kV ac and 3kV dc electrification systems and will be used by TFR's general freight business.


CSR is a 70% partner in CSR E-loco Supply, with local partner Matsetse Basadi holding the remaining 30%. The contract specifies a target of 60.5% for localised content.



Eight prototype wagons delivered to Tasmania Australia

On August 05, 2013, eight brand new prototype wagons which will be used for transport of container, coal, cement and ore were delivered to Tasmanian Railway, Australia.


This is the first contract signed with developed country by CNR Shenyang Locomotive & Rolling Stock Co., Ltd.. Total 4 types, 191 wagons will be delivered after passing the prototype wagon test.



A new contract for Belarus Railways signed

On July 17, CHINA CNR CORPORATION, Belarus Railways and China National Electric Import and Export Corporation inked a contract with for 18 of 7200kW electric locomotives in Beijing China. This is another new contract for the Europe railway equipment market. The consignment will be delivered within 21 months.



Two locomotives shipped from Xingang port Tianjin

Recently, two GK1E type diesel locomotives were shipped from Xingang port Tianjin to Liberia. It will be transported about 45 days to arrive at the pot of Liberia and then will be used for drawing the ore and other material freight fleet.



Traction motor contract won and fulfilled

On July 5, CNR Yongji Xinshisu Electric Equipment Co., Ltd. successfully delivered final batch 78 of YJ157A traction motors, total 114 sets, to India railway. Based on CNR’s self independent technology, J157A traction motor was competed with other bidding competitors in the World and won this contract.


Contracts signed for Indian freight corridor

REPRESENTATIVES of the Dedicated Freight Corridor Corporation of India (DFCCIL) have signed contracts worth a total of Rs 67bn ($US 1.15bn) with a consortium of Sojitz, Japan, and Larsen & Toubro, India, for Packages 1 and 2 of the Rewari – Iqbalgarh stretch of the Western Dedicated Freight Corridor (DFC).


The contracts cover all civil works and trackwork on the 626km section of the route, including 1388km of track, 112 major bridges and 1118 minor bridges. All works must be completed within 48 months.


The signing took place at a ceremony in Delhi on August 19 in the presence of Mr Takeshi Yagi, Japan's ambassador to India, Mr R K Gupta, managing director of DFCCIL, Mr Toshihiko Kita, managing executive officer of Sojitz ,and Mr S N Subrahmanyan, senior executive vice president of Larsen & Toubro.


The 1483km Western DFC will link Dadri near Delhi with Jawaharlal Nehru Port in Mumbai, running through the states of Haryana, Rajasthan, Gujarat and Maharashtra. The line is expected to open in 2017.


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