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Bombardier in China bullet train deal

(The Associated Press circulated the following story on August 30.)

SHANGHAI, China -- China's Railway Ministry has awarded contracts for upgrading key railway lines to six firms, including Montreal-based Bombardier Inc., Kawasaki Heavy Industries Ltd. of Japan and Alstom SA of France, state media reported today.

The deals, part of a $12-billion US ($15.8-billion Cdn) project to double the speed of trains on five railway lines to 200 km/h, mark the first major transfer of Japan's "Shinkansen," or bullet train, technology to China, the official Xinhua News Agency reported.

Kawasaki Heavy Industries' successful bid was made with Chinese partner Nanche Sifang Locomotive Co. It is expected to involve a modified version of the bullet train, which runs at a maximum speed of 275 km/h, the reports said.

Alstom is teaming up with Changchun Railway Vehicles Co., they said.

Alstom's TGV, or Train a Grande Vitesse, operates at a top speed of 350 km/h.

The third contract went to Bombardier and joint venture partner Bombardier Sifang Power (Qingdao) Transportation Ltd., or BSP.

The companies were chosen for the technology, design and production expertise they would be able to provide to China and Chinese companies, Xinhua reported.

Five railway lines are to be upgraded, stretching over 2,000 kilometres. They include a line between Beijing and the northeastern city of Shenyang and another connecting Qingdao and Jinan, two major cities in eastern China's Shandong province.

The reports did not clearly indicate which companies were awarded which projects.

The projects do not include a planned 1,120-kilometre, high-speed trunk line between Beijing and Shanghai. That project, due to open bidding later this year, falls under the auspices of the government's National Development and Reform Commission.

Japan, France and Germany have all lobbied Beijing hoping to win contracts for that project, forecast to cost as much as 120 billion yuan ($19.1 billion).

Chinese officials say they have not settled on what sort of technology to use for the new rail link, but that they plan to open the project to international bidding once a decision is reached.

The Railway Ministry has said China needs to spend two trillion yuan ($318 billion) on expanding the rail system, which is operating at full capacity and can only handle about a third of current demand for cargo transport.

China began raising the speed at which trains operate in 1997. The most recent upgrade took the average speed for the fastest lines to 160 km/h.

Monday, August 30, 2004

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