Railway Reform: Toolkit for Improving Rail Sector Performance - ppiaf

Railway Reform: Toolkit for Improving Rail Sector Performance
Case Study: China Rail
courages industrial railways to provide public passenger and goods transport services
on a commercial basis.
While the RRAs have been given progressively more commercial freedom in ancillary
activities, their core railway function is still closely circumscribed and
monitored by MOR, thereby providing the integrated and coordinated national
railway system that is branded as China Rail.
1.2 Rail Sector Strategy
China’s railway policymakers face two immense strategic challenges. The first is
to increase infrastructure capacity and quality. The second is to reform the industry
so it can adapt and thrive in a modern market economy.
To meet the infrastructure challenge, China has embarked upon the world’s biggest
program of railway construction since the nineteenth century. In January
2004, the State Council approved in principle the Mid- and Long-Term Railway
Development Plan, setting out construction priorities and providing the framework
for developing future five-year plans. In 2004, costs estimates for implementing
the Plan were RMB 1.7 trillion through 2020 (in 2004 prices). This has
since been revised upwards partly due to the Economic Stimulus Program Government
adopted in 2008. The new plans will increase the public rail network to
120,000 km by 2020, up from 75,000 km in 2005, including separate high-speed
passenger routes on the main corridors. By 2020 half of the network will be double-tracked,
or electrified, or both. As of early 2011, the high-speed passenger
network is ahead of schedule but may in due course be slowed to manage debt.
The completed network will feature services up to 350km/h based on four northsouth
and four east-west corridors and by 2020 will have 16,000 route-kms,
more high-speed rail line than the rest of the world put together. Also, three regional
intercity systems covering major cities and towns in each are planned in
the Bohai Sea area (Tianjin, Beijing, Qinhuangdao); the Yangtze River delta
(Shanghai, Nanjing, Hangzhou); and the Pearl River delta (Hong Kong,
Guangzhou, Shenzhen).
Rail freight transport will also be enhanced. Existing network capacity freed up
by launching new dedicated passenger lines will be used to meet growing freight
demand. The Plan includes high-capacity coal transport corridors, based on
China’s ten major coalfields, to provide annual coal transport capacity of 2.0 billion
tons by 2020. The rail container industry, so far rudimentary, will be boosted
through upgrading those railway lines with intensive container transport. The
MOR established a joint venture with international investors to build container
terminals in 18 major centers and ports that will be linked by regular container
train services. Redeveloping existing freight terminals will establish another 37
satellite terminals, with 150 more conventional stations equipped to handle containers.
Some major routes with heavy container traffic are being upgraded to
allow double-stack container trains.
China Rail progressed rapidly in pursuing reforms to improve its organization
and the railway industry is embracing new participants. By 2005, MOR had supported
the establishment of 46 joint venture railways (of which 24 were operating)
with provincial governments, enterprises, and to a minor extent, private in-
The World Bank Page 340