Rail & Infrastructure

Train cancellations

Construction of subway system halted in Inner Mongolia on debt concerns

Train-w

Going slower in Guizhou

A bad reputation can be hard to shake. Despite years of operation almost entirely without incident, China’s high-speed trains are still tainted by a deadly crash in 2011 (see WiC117). Part of the government’s response to that was to reduce the maximum speeds that trains could travel from 350 kilometres per hour to 300km/h.

This year it seemed that the railway authorities were ready to move beyond the disaster, launching a new type of train that travels at 350km/h, between Beijing and Shanghai (see WiC373).

But a new scandal is brewing that renews some of the doubts about the top-speed performance of the bullet trains and which is forcing the railway operators to slow down once again.

An investigation led by China Railway Corp (CRC), the national operator of freight and passenger services, found that construction of several tunnels on a line connecting Shanghai and Kunming, the capital of southwest Yunnan province, was “substandard”.

The review started in the summer around the time that one of the tunnels (all of which are in Guizhou province) had flooded. Rail services were suspended for three days, the South China Morning Post reports. The CRC only announced it had been conducting a fuller study last week, however, after a weibo user shared pictures of crumbling interiors in one of the tunnels and leaked internal documents about the subpar construction.

The 2,252km line opened in December 2016, operating trains with maximum speeds of 300km/h. But the blogger who revealed the problems in Guizhou also alleges that trains on the same line slow to just 70km/h when crossing the Beipanjiang Bridge, due to safety concerns.

When the bridge opened last year, New China TV bragged that trains would cross it at top speed.

According to CRC’s statement, the main contractor for the Guizhou section of track, a subsidiary of CRC itself, has been banned from bidding on national projects for the next year. It will also shoulder 90% of the costs of repairing the line.

Further north some railway projects are being halted due to financial rather than safety concerns.

In Inner Mongolia two cities have been ordered to stop expanding their subway networks, due to worries that the public projects are too highly leveraged. Caixin Weekly reports that the central government called a halt to an underground network planned in Baotou after just two months of construction. Allegedly local officials were told that the Rmb30 billion ($4.5 billion) project was too ambitious for a city of Baotou’s size (2.7 million people) and ordered to reallocate the funds to support local businesses instead.

By the end of last year, the National Development and Reform Commission had granted 43 cities permission to build subway systems and 27 of those networks are already operational.

However a source told Caixin that NDRC officials have increased their scrutiny of the financials of newly proposed projects. That’s a change from the past where spending on public infrastructure was favourite strategy for boosting local GDP and job creation.

More recently concerns have grown over the level of local government debt incurred from all the construction (see WiC323). The Financial Times reports that the planned subway system in Baotou would have increased the city’s Rmb90 billon debt by at least a fifth, for instance, with 60% of the construction costs funded by bank loans.

The day after Baotou was told to stop work, nearby Hohhot was given the same signal on its Rmb95 billion rail expansion plan.

The provincial capital of three million people will continue to build two lines in its rail network, due for completion in 2020.

But plans for additional track scheduled to open in 2023 have been cancelled.

Caixin reported that an NDRC official in the region has been telling city-level governments that “the wind has changed direction”.


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