FDI welcomed for Railway Project

　　Details of a project for a new railway ferry link between Yantai in east China and Dalian (YDRFP) in northeast China were presented in Beijing Friday insgroupsto draw direct foreign investment. This is a dramatic change in China詓usual policy for financing railway construction projects.

　　The Yantan-Dalian railway ferry project, the first Chinese railway project to accept direct foreign investment has drawn attention from foreign investors with its golden route, excellent investment environment, and high profit return.

　　A growing number of foreign companies are interested in negotiations, and include firms from Germany, France, Japan, and the United States with even individual investors expressing keen interest.

　　According to the Chinese Ministry of Railways, the rail/ferry link begins in Dalian City at the south end of the Liaodong Peninsular and terminates in Yantai City in the north part of Shandong peninsular, crossing the Bohai Bay in a direct line for 79.4 nautical miles or 147 km and will shorten the traveling distance between Northeast China and Shandong province by 400 km, and Northeast China and the Yangtze delta by 1000 km.

　　With the authority of the Ministry of Railways, the Shangdong Provincial Government and Dalian City Government, Sinorail Bohai Train Ferry Co. Ltd (SBTFC), the Chinese sponsor, is now seeking direct foreign investment to establish a joint venture or cooperation company which will be fully responsible for financing, constructing, operating and maintaining the project.

　　Chi Baozhang, general manager of the SBTFC, said the project will be carried out by using the BOT (build, operate and transfer) method as traditionally used in joint ventures.

　　The total investment is estimated at 3.39 billion yuan (US.4 million), of which approximately 2.43 billion yuan will be used for construction, said Chi, adding that investors?profit return is predicted to be above 12 percent.

　　According to Chi, to create a good investment environment, the Chinese Ministry of Railways, Shangdong province and Dalian City government have promised to ensure the completion and operation of relevant railways and roads as well as rear transport corridors.

　　Investors will also be given preferences for the use of land, water and power, communication facilities, roads and railways, he added, and favorable taxation policies will also be given to the company in accordance with the laws and regulations of the Chinese central government, Shangdong province and Dalian city government.

　　Wang Chunsheng, director of the Railway Cooperation Department under the MOR said that the examination of investment offers will start in May and hopefully to be completed by June.

　　The project is estimated to be completed in two and a half years and putsintosoperation by 2005.

　　Director of the Development Planning Department under the Ministry of Railway, Cao Jing said the direct use of foreign investment in the Yantai-Dalian Railway Ferry Project can help reveal diversified investment channels in railway construction.

　　China could also learn from foreign experience in building and managing ferries, and improve its railway management.

　　If the first project goes well, it will be promoted in future railway projects, said the official.

　　Under the past planned economy system, China's railway investment, construction, operation and management were all handled by the government. As a result, investment in railway construction for a long time faced problems fromshavingsonly one source of finance and was limited.

　　An official of the State Development Planning Commission said that the Chinese government should try to attract more nongovernmental investment through the market instead of investing itself, thus generating more interest.

　　The project, as the first in the history of China's railways, creates a new model in financing construction capital. To create a good investment environment, the Chinese Ministry of Railways, Shangdong province and Dalian City Government have pledged to ensure the completion of relevant railways and roads.

　　Investors will also enjoy preferences for using land, water and power supplies, communication facilities, roads and railways, said the Rail Ministry, adding that the project has a bright future and will repay overseas investors well.

　　Cao Jing sees the project as a good start in exploring new investment options, and believes that its successful operation will help open up China's railway sector.

　　Representatives from Credit Lyonnais, a company which joined the Shenyang-Qinhuangdao Railway project, were present at the project promotion meeting held jointly by the Chinese Ministry of Railways (MOR), the government of Shandong Province and the Dalian city government. Guillaume Dehan, corporate manager of the Beijing Office of Credit Lyonnais, said this project is very special as it is the first time foreign investors have been able to invest directly in a Chinese railway project. He was hoping to acquire more information from the promotion meeting insgroupsto look at the possibility of cooperation.

　　In France, railway departments are financed, built and administered wholly by the government, said Dehan, adding that the Yantai-Dalian Railway project shows that China's railway infrastructure construction is becoming more open.

　　The Transportation and Economic Research Associates Company from the U.S. sent three senior staff to attend the meeting. Asil Gezen, president of the company said the Yantai-Dalian railway project will play a positive role in China's railway building, and will be very helpful for advancing technological cooperation and exchanges between China and other countries.

　　Huber Guy, a senior manager from a France and Saudi Arabia joint venture, showed intense interest in the project. He expressed great satisfaction with the investment environment, saying he believed that the two cities of Yantai and Dalian both have a very prosperous future.

　　Director of the Development Planning Department under the MOR, Cao Jing, said that foreign investors are entitled a share-holding of 25 percent to 49 percent in the project.

　　"Thorough preparations have been made for the project including prospecting, designing, feasibility studies and profit return estimates, so we have full confidence in the success of this project,"he said.

　　World-Class Dream for China's Railways

　　Modern Railways 2002 Exhibition opened in Beijing on June 12, which attracted more than 150 businesses from a dozen countries. Vice Minister of Railways pointed out that the country's railways still lag behind developed countries. China would open up its railway market step by step.

　　High-speed trains running from Beijing to Shanghai at 350 km/h in only 4 and half hours ?a dream or reality?

　　Sitting on the tidy, comfortable railway seats and enjoying the considerate service of the Japanese Shinkansen ?are we in Tokyo or Beijing?

　　All this occurred at the Modern Railways 2002 Exhibition that opened in Beijing on Wednesday,swheresvisitors can experience the latest Japanese technology and ideas. The Japanese railway sector has brought a large number of railway companies to the exhibition, indicative of their high hopes of involvement in China's railways market.

　　Japan built the world's first high speed railway, the Shinkansen which has run at a speeds around 300 km/h for 39 years without a single person being killed.

　　"We hope to participate in the Beijing-Shanghai high speed railway project, and we hope China has its own Shinkansen,"said Yasuki Kurasawa, administrative director of the Japanese Overseas Rolling Stock Association, voicing his belief that China's railway sector will be accessible now that the country is in the WTO.

　　With the theme of "raising speed, improving safety, developing high-speed railways and information systems" the exhibition has attracted more than 150 businesses from a dozen countries including Germany, France, the United States, Japan, Canada and the Republic of Korea.

　　"It's a collection of the world's top railway technology and products,"said Xiong Yongjun, head of the sponsor, the China Academy of Railway Sciences (CARS). He said that he hoped the exhibition would boost China's railway development with more advanced technology and ideas.

　　Siemens Transportation Systemssgroupsfrom Germany, for example, showed a series of model trains, such as the new European "Concept train"capable of the world's top speed, and a newly designed high-speed train on which it is convenient to work.

　　China to open up railway market step by step

　　China's Vice Minister of Railways Cai Qinghua pointed out that the country's railways still lag behind developed countries. China would open up its railway market step by step following its WTO entry, and the technology gap would shrink as more foreign capital, advanced technology and management expertise were introduced.

　　Statistics show that China will spend 350 billion yuan (about 42.3 billion U.S. dollars) on railway construction during the current tenth five-year plan period (2001-2005), in a bid to achieve international levels at the end of the 20th century, and then more advanced levels in some key railway sectors by 2015.

　　China has decided to use top technology for the Beijing-Shanghai High-Speed Railway Project, which has drawn worldwide attention.

　　The 1,300 kilometer-long railway will be its first ever high-speed railway.

　　Chinese railway experts say that no matter what kind of technology is used, the project will tell the world that it is no longer a dream for China's railways to reach world standards.

　　Background

　　The past 20 years have witnessed great improvement on the equipment and technology in the Chinese railway industry. By 2000, China's total railway route length had reached 68,000km. Speed-raise on the main railway trunk lines had achieved historical breakthrough. The information system had grown in a stride. The safety equipment of transportation had extensively improved. Goods traffic organization had witnessed new development. Manufacturing technology for the rolling stock had stepped on higher level. The technology of railway construction had achieved great progress. However, to catch up with the advanced technical level of developed countries, Chinese railway has a long way to go.

　　The advent of the new century marks the beginning of "Tenth Five-Year Plan"(2001-2005) for the Chinese railways. In the next 4 years, China will continue with the positive financial policy, attach great importance to and support the infrastructure construction and provide the railway with a larger development space. As clearly stated in Baseline of Tenth Five-Year Plan for Economic and Social Development of People's Republic of China approved in the fourth session of the Ninth National Congress dated on March 15, 2001, the Chinese railway plans to build and upgrade "eight Vertical and Eight Horizontal"railway trunk lines during the "Tenth Five-Year Plan"period , expand the western railway network, speed up technical upgrade for the existing railway lines and increase running speed of trains. It also plans to construct Xining-Golmud railway line, Beijing-Shanghai high-speed railway line and territory-bound railway lines in northwest and southwest regions. The railway route length will reach 75,000 km by 2005. By the end of "Tenth Five-Year Plan"period, the main railway technical equipment will be upgraded to the international standards of the late 20th century. Some key technological areas will catch up the international level by 2015. To meet these goals, it is essential to introduce and learn the foreign technology and experience.

　　Following China's official entrysintosWTO, the Chinese railway will further adhere to the principle of conducting R & D by combining self-support with the introduction of overseas technology. The state-of-the-art technology and successful management expertise will be introduced from overseas according to the actual conditions of the Chinese railways. Some equipment will be directly adopted to shorten the distance between the domestic and foreign technical level. In the "Tenth Five-Year Plan"period, US billion will be invested in the railway construction, which will undoubtedly offer new trade opportunities to the domestic and foreign enterprises willing to join hands in developing the Chinese railways.

　　The "Tenth Five-Year Plan"period will see the Chinese railway achieve new breakthroughs and development in important technological areas as shown in the following:

　　1. Information management system for the Chinese railways

　　The primary strategic goals of technological progress and innovation for the Chinese railway in the next five to fifteen years are to fully exploit such hi-tech achievement as the modern communication, computer network and control technologies and to build information management system of high level in the fields of railway production, operation and management network.

　　2. Speed-raise strategy for the Chinese railways

　　Furthering the preliminary work for Beijing-Shanghai high-speed railway line insgroupsto start construction earlier; building Beijing-Shenyang Rapid Passenger Line through construction of Qinhuangdao-Shenyang Passenger Dedicated Line and technical innovation for Beijing-Qinhuangdao Line; promoting and applying relevant technologies of 160km/h train in a large scale; achieving the highest speed of 140-160km/h of the passenger traffic network; establishing rapid freight system and increasing freight speed for goods with high added value and containerized goods.

　　3. Train running safety monitoring network

　　During the "Tenth Five-Year Plan"period, China will further increase investment in safety technology and speed up R & D and promotion of new technology and new product. The main task is to develop the safety monitoring network-based technology and equipment and to initially set up safety monitoring network, achieving mutual monitoring and self-monitoring for moving equipment and fixed equipment.

　　4. Technical upgrade of the railway equipment

　　The Chinese railway equipment will be upgraded with hi-tech applications. New materials and advanced manufacturing technology will be applied to the rolling stock in a positive way. High-speed trains, tilting trains, EMU and DMU of over 200km/h will be developed. Dedicated freight cars of various types and new passenger cars, as well as new types of bogie for freight cars will be developed. Signal and communication will be digital, networked, intelligent and comprehensive.

　　5. Technical advancement in the railway construction

　　New technology and materials will be extensively developed and applied. Integrated and intelligent survey designs will be promoted. Treatment technology for soft soil roadbed and construction technology for once-through bridge works and high-speed large number switch will be developed. Railway construction technology and machinery under special geological features, complex physiognomy and unfavorable climate conditions are under study. Heavy-duty track maintenance machinery are applied to the busy trunk lines to improve the overall quality of the railway network.