China opens new high-speed rail link as report claims $25bn rail investment has been approved

Out-Law News | 18 Nov 2014 | 10:03 am | 1 min. read

The first high-speed rail service has started operating in China’s northwest Xinjiang Uygur Autonomous Region, cutting the time it takes to travel between the regional capital of Urumqi and the eastern city of Hami by half to three hours.

Meanwhile, Reuters said China's National Development and Reform Commission (NDRC) has approved the construction of five railway projects worth $24.93 billion. According to the report, the new railway lines would run in the southern province of Guangdong, southwestern provinces of Guangxi and Sichuan, Inner Mongolia and the western province of Gansu.

China’s state-run Xinhua News Agency said the 530 kilometre Urumpi to Hami railway line, which has a design speed of more than 200 km per hour, is part of the 1,776-km Lanxin high-speed railway linking Urumqi with Lanzhou, the capital of the northwestern province of Gansu, which is expected to enter service by the end of this year.

A further high-speed rail link, connecting Lanzhou and Beijing, is now under construction and is expected to be completed by 2017, cutting the journey time from the current 41 hours to 16 hours, Xinhua said.

Reuters said the approvals are in addition to the go-ahead given by the NDRC last month for five additional airports and three railway projects.

Earlier this year Chinese Premier Li Keqiang called for increased private investment in the country’s railways, saying support provided solely by the state “must become a thing of the past”. Li praised the role railways play in “stabilising economic growth and social harmony”, but he urged the China Railway Corporation Limited to seek “innovative sources of new investment”, which he said would be important to reform.

An action plan on railway financing, backed by China’s state council (cabinet) in April 2014, called for a fund that would be open for private investment.

Last March, the World Bank approved a total of $600 million in loans to China for projects including improvements to public transport services and an expansion of railway capacity along a key transport corridor in the country’s northeast.

A World Bank paper has said the cost of high-speed rail construction in China is one third lower than in other countries thanks to extensive planning, greater standardisation and the development of “innovative and competitive capacity” in the manufacturing process.

According to the paper, ‘High-speed railways in China: a look at construction costs’ (8-page / 768 KB PDF), by the end of 2013 China had built a HSR network of more than 10,000 route kilometres, “far exceeding that in any other country and larger than the network in the entire European Union”.