Rail & Infrastructure

A tempting offer?

Talk of a CRCC bid to build UK’s high-speed rail – but the SOE denies it

Boris-Johnson-2 w

Johnson: going ahead with HS2 but likely not with Chinese help

One unanticipated outcome of the Covid-19 crisis is that it has given the Chinese another chance to show the speed at which they can build (in this case, two new hospitals in Wuhan, see WiC482).

The feat wasn’t lost on those with an interest in Europe’s most costly transport-related infrastructure project, the UK’s high-speed rail link, HS2.

Debate about the railway’s expense came to a head this month after Boris Johnson, the UK prime minister, gave the project his blessing. Critics claim that the railway’s returns will never cover the costs of construction. But adding another point of contention recently was the revelation in UK media that China Railway Construction Corp (CRCC) had made a belated bid for a piece of the action.

In late January, Building Magazine – a title founded in 1843 – published a letter ostensibly from CRCC to HS2’s chief executive, Mark Thurston, generating further debate about what role, if any, the Chinese might play.

In the letter – which carried the logo of CRCC subsidiary China Railway 16th Bureau Group – Thurston was informed that the Chinese could build the new line in about five years, compared to the current 20-year timetable. It added that its construction costs would come in closer to the £65 billion ($85 billion) target imagined in 2015, much lower than the £106 billion that an independent review body is now estimating.

There was also a commitment to build the line connecting London with England’s north at a fixed price and with funding worth 80% of the project’s value.“You will find that the Chinese way is to seek solutions, not linger on obstructions and difficulties,” the letter further promised.

Building Magazine’s scoop was soon picked up by the mainstream press in the UK. That led to Britain’s transport minister Grant Shapps being quizzed about it on the BBC. He distanced himself from the bid during the interview, saying that the government wasn’t involved in direct discussions with CRCC.

That was no great surprise as it subsequently emerged that the Chinese state-owned enterprise knew nothing about the letter and the proposal it contained. In a statement published on February 16 the China Railway 16th Bureau Group denied all knowledge of it. “Our company has never authorised or entrusted anybody to write in the name of our company to High Speed Two (HS2) on the matter of HS2. In fact, our company knew nothing about the letter which appeared recently in certain media and was written in our company’s name to the Chief Executive Officer, High Speed Two before our company read the letter in the media,” said a statement on its website.

If this flat denial were not enough, it should be added that there were red flags in the original correspondence. Not only did it contain a couple of serious spelling mistakes (the city of Birmingham as ‘Birmijgham’, for instance), it wasn’t even authored by a senior executive from China. Instead the signatory was a Dato TG Ong, whose corporate address is listed as Jalan Ampang in Kuala Lumpur. Nor was any job title at CRCC specified by the author (‘Dato’ is a Malaysian honorific, conferred much in the way knighthoods are in the UK).

All in all, it should have been puzzling that a proposal of this scale emanated from Malaysia rather than from corporate headquarters in Beijing.

Also puzzling: the letter claimed trains would be delivered that were capable of travelling at 420kph. However, the most advanced of China’s bullet trains have top speeds of 350kph.

So if CRCC did not write the letter – as it proclaims – then who did and why did they want it leaked to the UK media?

This aspect remains a mystery, but the timing may have been designed to portray the British government as becoming overly-reliant on China’s technologies.

Chinese involvement in other mega projects in the UK has stoked controversy – for instance, a deal to build a £20 billion nuclear power plant at Hinkley Point (see WiC340).

An even more sensitive decision was that of Johnson’s government last month to green light Chinese giant Huawei to be part of the rollout of the UK’s 5G infrastructure, albeit in areas deemed ‘non-core’ to the network (see WiC481).

This provoked a furore in Washington – which is convinced that Huawei will use the technology to spy on behalf of the Chinese government – and has also caused splits within Britain’s own defence establishment.

Other members of Johnson’s political party have been arguing that the British shouldn’t be working so closely with China, including Tom Tugendhat, chairman of the Foreign Affairs Committee in Britain’s parliament. He told the BBC’s Today programme that the UK needs to think carefully about its China strategy. Should we be dealing with a country that doesn’t respect human rights, he queried?

Intriguingly, Dato Ong’s letter also draws a direct link between Huawei and HS2. “There seems to be a willingness on the part of Government to embrace a major contribution to 5G from the Chinese with regard to Huawei. We believe this situation could be compared,” he writes.

The proposals for HS2 aren’t universally backed in the UK and the letter may have been intent on making some mischief here too, by showcasing the cost overruns and lengthy completion schedules that have blighted the HS2 debate for a decade.

Of course, while it has denied that it wrote this letter, it seems likely that CRCC remains interested in HS2 – behind the scenes it may well be trying to tee up involvement in the project’s second phase.

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