Yesterday the World Bank's Board of Executive Directors approved a loan of US$200 million to China for the Third National Railway Project in Guizhou and Yunnan.

This project aims to provide a major increase in capacity to the Liupanshui-Zhanyi section of the Guiyang-Kunming railway line, improving the service quality of passenger as well as freight transport by halving the transit times and enabling operation of double-stack container trains.

The 254-kilometer Liu-Zhan line is at the western end of the Shanghai-Kunming corridor and crosses the watershed between the Yangtze and Pearl rivers. It was built as a single track in 1966 and electrified in 1988. It is now working close to capacity and cannot cater for the forecast traffic, as the economy in western China continues to grow.

To expand its capacity to transport freight and passengers to and from Yunnan, the government plans to realign the track to allow higher speeds; double-track the single-track section between Liupanshui and Zhanyi, and remodel the Liupanshui terminal area.

Upon completion, the project will quadruple the capacity of the line and improve sectional travel times significantly, thus meeting the growing demand for transport of people and goods between Guizhou and Yunnan.

"It is clear that if railways are not to be a brake on the future economic development of China," said John Scales, World Bank Transport Sector Coordinator in Beijing and Task Manager for the Third National Railway Project, "additional capacity must rapidly be developed.

The World Bank supports the provision of additional capacity, particularly in the West, together with meeting the challenges of functioning in a market economy amid growing competition from other transport modes and the greater environmental and energy efficiency benefits railways offers."

The total project cost is estimated at approximately RMB 8.8 billion (US$1.1 billion). The World Bank finances US$200 million toward it.

(China Development Gateway January 24, 2007)