Firms Ride High on China’s Huge Rail Upgrade – Bruce Stanley

P20070128011.jpgSome sexy numbers for major railway-sector multinationals: China will add 10,540 miles of new track and decicate 4,340 of those solely to high-speed passenger trains, and by 2020 the country will have a track network of 62,000 miles. Via the Wall Street Journal (photo via

For General Electric Co., Siemens AG and other makers of locomotives, signaling devices and related high-tech railway gear, the planned spending represents a potential sales bonanza. In the latest deal, Bombardier Inc. of Canada Monday announced it would provide equipment to power and control 500 freight locomotives to be delivered to China’s Ministry of Railways starting in 2009. The contract will earn Bombardier $480 million.

China’s railroads, many of which were built in the early 20th century, have struggled to keep pace with the demands of its burgeoning economy. Shortages of rolling stock make for packed passenger cars, especially during national holidays such as the Spring Festival that starts this weekend. China transports an average of 7.6 million passengers per kilometer (about 12 million per mile) of a train route, almost six times the world average.

The squeeze on freight capacity is even worse. China moves more than 10 times as much freight per kilometer of its train routes than the global average. And while shippers in China fill an average of 160,000 freight cars each day, they need closer to 200,000, according to the Asian Development Bank. [Full Text, subscribers only]

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