Japanese consortium bid for railway project
By Jiang Jingjing (China Business Weekly)
Updated: 2004-05-24 10:15

Six Japanese companies plan to form a consortium to bid for a Chinese railway upgrade project with a modified version of the Shinkansen bullet train, but analysts predict Chinese railway authorities would only introduce part of the technology, rather than importing the whole train at the initial stage.

AFP reported last week in Tokyo that Kawasaki Heavy Industries Ltd, Hitachi Ltd, Mitsubishi Electric Corp, Itochu Corp, Mitsubishi Corp and Marubeni Corp announced their plan to bid for trains which can double the current train speed in China on five major existing railway lines to 200 kilometres per hour.

The five train lines includes between Beijing and Shenyang, Northeast China's Liaoning Province, and another to connect Qingdao and Jinan in East China's Shandong Province.

RAIL: Nation likely to adopt partial tech

The value of the project, stretching a total of 2,000 kilometres, is estimated at around 100 billion yen (US$880 million).

The train can run at a top speed of 275 kilometres per hour.

The Japanese group is set to compete against Siemens AG of Germany and other French companies for the Chinese order.

The Ministry of Railways declined to release any details on the bid, but an unnamed official with the ministry's technology department confirmed the bid.

If the Japanese firms win the bid, expected to take place no later than the end of this year, it would mark the first major transfer of Japanese Shinkansen technology to the Chinese mainland, the report said.

The Japanese consortium will co-operate with Chinese rolling stock maker Nanche Sifang Locomotive. "Although we are initially planning to bring Shinkansen trains from Japan, we are considering transferring train technology to Nanche to produce trains locally," a spokesman with Hitachi said.

"China wants to boost the speed of its trains as part of ongoing efforts to improve infrastructure and we would like to offer our technology," the spokesman said.

"With this project, we hope to prove to China that Japanese Shinkansen trains are good and reliable," he added.

Hitachi and Kawasaki Heavy are already among some 40 Japanese firms bidding for a multibillion dollar high-speed rail line project between Beijing and Shanghai based on bullet train technology, although no date has been set for awarding the contract.

"We hope this six-partner bid will lead to another big order," the Hitachi spokesman said, referring to the Beijing-Shanghai line.

Staff with Mitsubishi China told China Business Weekly on condition of anonymity that the company's Tokyo headquarter is preparing for the bidding, and the Chinese branch only deals with communication and information.

The Japanese Shinkansen service, first introduced to showcase the country's technological prowess during the 1964 Tokyo Olympic Games, has trains that reach speeds of up to 300 kilometres an hour in scheduled service.

In October 2005, the service will make its overseas debut in Taiwan after a seven-member Japanese consortium, including Hitachi, Mitsubishi Heavy and Toshiba, won a multibillion dollar contract there, according to the AFP report.

However, analysts rule out the possibility of importing the whole train at the initial phase of the co-operation.

"Shinkansen is advanced in terms of technology. Germany, as a traditional manufacturing country, has many companies equipped with comprehensive and complete management systems, such as Siemens," said Sa Shuli, professor with Beijing Jiaotong University and consultant to the Ministry of Railways.

France-base Alstom is also competitive in the sector, Sa added.

"What will the ministry do is probably to introduce part of the technology, and take advantage from various aspects.

"What China needs is not only the technology on locomotive and cars, but also on rail bases and signals. Japan is not advanced in all these points."

Sa told China Business Weekly in an exclusive interview that when it comes to strategically-important projects, political factors are vital for decision-making.

"It is sensitive to approve Japanese bidding in this respect," he said.

China actually has enough technological capability to increase the current train speed to 160 kilometres per hour, which is the target of speed upgrades in China's 60,000-kilometre-railway network, according to Sa.

The current speed for most lines is below 100 kilometres per hour.

He said the key demand for China is not the hardware, but rather the software, or in other words, the management system.

"Unlike other countries, China has a vast land and complex railway network. A single technology cannot solve the problem (speed upgrade).

"The management of the network needs to improve before the realization of the speed improvement."

But when China wants to develop its high-speed railway, which is above 300 kilometres per hour, foreign advanced technology is crucial, he said.

Since 1994, China has sped up its railway network five times. The sixth upgrade will be done in the first half of next year. So far there are 7,700 kilometres of railways reaching the speed of 160 kilometres per hour, according to the Ministry of Railways.

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