China's high-speed rail network has come under increasing scrutiny after the discovery of corruption at the very top of the railway ministry. People have also been voicing concerns about safety and environmental sustainability.
China's high-speed rail network has come under increasing scrutiny after the discovery of corruption at the very top of the railway ministry. People have also been voicing concerns about safety and enShow more

China's high-speed rail faces bullet



As China's economy boomed, high-speed railway lines in the country were being built almost as quickly as the sleek white bullet trains that hurtle down the tracks.

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Last Updated: May 30, 2011

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Cutting through the countryside at 300kph or more, they were compared to the 19th century railroads of the US in their opening up of remote parts of the nation.

Yet in recent months the railway sector has been tarnished by multimillion-dollar corruption allegations and officials have put the brakes on a construction programme unprecedented in scale.

In February, Liu Zhijun, the railways minister, was sacked and put under investigation over allegations he took 822 million yuan (Dh465m) in kickbacks. He was alleged to have pocketed up to 4 per cent of the value in eight contracts, according to state media reports.

After Mr Liu's career hit the buffers in spectacular style, Sheng Guangzu, the new railways minister, announced a scaling back of the ambitious rail construction programme amid concern the country's railway companies were accumulating vast amounts of debt.

While not a complete reversal of policy, it nonetheless represents a major change given how much national pride is tied up with China's high-speed rail network.

This year, 745.5 billion yuan is being invested by the railways ministry, down from 823.5bn yuan last year. Also, Mr Sheng has announced many trains that were going to run at up to 350kph will instead travel at a more modest 300kph. The need to cut running costs so tickets can be cheaper was given as the reason, and commentators have also said safety is likely to have been a factor.

In a further sign the authorities are no longer prepared to press ahead with projects regardless, China's ministry of environmental protection halted the building of one scheme this month because of an unapproved route change. Another line was ordered to cease operations because it had not been environmentally assessed.

In recent years many have questioned whether China has gone overboard in its enthusiasm for high-speed rail. The country already has more than 8,000km of high-speed track and plans to double this figure by 2015.

"Critics have been saying the development is just pushing ahead too fast. The scale is too large and beyond the means of regulation," says Professor Li Siming, the director of the Centre for China Urban Regional Studies at Hong Kong Baptist University.

Many newer lines have struggled to drum up business, and poorly paid migrant workers have complained that cheaper slow trains are being scrapped in favour of unaffordable rapid services, pushing thousands on to long-distance buses.

Academics have been quick to point to the debt ratios of the country's railway companies although in March Mr Sheng insisted that, at 58 per cent, they were manageable.

Yet in the first quarter of this year, companies run by China's ministry of railways lost 3.8bn yuan.

There are also worries about the type of development high-speed railways promote.

While they "enhance the developmental potential of the western portions of the country, the lagging regions", says Prof Li, experience from western Europe and Japan shows they also tend to concentrate growth in the main urban centres, leaving others behind.

"All these [large] urban centres tend to be strengthened further, but the minor ones in between [risk being] sidelined because the train will bypass them," he adds.

High-speed rail can also hit airlines hard, as a rapid train may take only a little longer than the plane, especially when the easier check-in procedures are factored in. Railway stations also tend to be more conveniently located in city centres.

According to Li Jiaxiang, the head of China's Civil Aviation Administration, on routes of less than 500km, high-speed trains will take 50 per cent of travellers away from planes, and 20 per cent on journeys between 500km and 1,000km.

Some observers have estimated the effect will be even more severe. Robert Bruce, an analyst based in Hong Kong with CLSA Asia-Pacific Markets, says 75 per cent of air travel trade could be swallowed on sub-500km routes and 40 to 50 per cent on those between 500km and 800km.

There is, he says, "a distinct possibility" some short-haul air routes could disappear completely in the face of competition from high-speed trains.

Already this effect has been seen. Since the opening of a fast train service between Guangzhou and Changsha the number of flights a day has reportedly dropped from about a dozen to just three. Between Shanghai and Nanjing, there are now just a couple of flights a day instead of about half a dozen previously.

State media have said in recent days airlines have suffered share-price dips ahead of the opening of the flagship Beijing-to-Shanghai high-speed line next month. The announcement that the maximum speed has been cut from an intended 380kph to 300kph could provide welcome relief for carriers.

"That's a positive for the airline industry, although we're not sure how many routes it will impact," Mr Bruce says.

Despite the effect of high-speed rail on air passenger volumes, Mr Bruce still expects China's aviation sector to grow by more than 9 per cent annually until 2014.

Moving some air traffic to high-speed rail is probably a good thing in environmental terms, says Prof Li.

"Developing a network to connect the major cities is probably the appropriate move from an environmental perspective in terms of the diversion of traffic from air to rail," he says.

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