China's rail colossus 'one of a kind'

PUBLISHED : Thursday, 15 March, 2012, 12:00am
UPDATED : Thursday, 15 March, 2012, 12:00am


China has built the world's biggest rail network in modern history - and done so in the quickest time - but its construction model is unlikely to be adopted elsewhere because of the huge concentration of power in the country's Ministry of Railways, a World Bank report says.

'The concentration of responsibility, power and resources, in the Ministry of Railways is not favoured by most countries,' the report said.

Most countries had instead opted for more checks and balances in the railway sector, and more external scrutiny and wider accountability and China's railway programme would therefore not be easily replicated elsewhere in the world, it said.

There are growing signs that Beijing is aware of the criticisms and intent on reforms.

On March 5 at the Chinese People's Political Consultative Conference (CPPCC) in Beijing, Premier Wen Jiabao said his government would promote reform of the rail and power industries, and encourage private investment in railways.

And two days later, four CPPCC members took the unusual step of publicly criticising the Railways Ministry for its national rail monopoly, the lack of separation between state and business, as well as poor supervision, according to mainland media.

On the same day at the conference, Railways Minister Sheng Guangzu said he had not heard anything about the Railways Ministry merging with the Ministry of Transport, despite calls for the merger from some experts.

Between 2008 and 2020, China aimed to expand its rail network from 75,000 kilometres to 120,000 kilometres, including adding 16,000 kilometres of high-speed rail, the World Bank said. 'It is the world's largest national railway development for more than a century.' A rail project that took five to six years in China would take seven to 15 years in almost any other country, the World Bank said.

Procurement can take less than three months in China, while it would take at least one year in other countries, the report said. In China's rail sector the process favours the employer (the Railways Ministry or a state-owned rail company), while it favoured contractors in other countries, the World Bank said.

Recently, media reports alleged equipment was procured at exorbitant prices for high-speed trains manufactured by CSR Corporation, a state-owned rolling stock manufacturer. CSR denied it paid excessively high prices or resorted to illegal procurement practices.

A key reason for the rapid growth of China's railway system was the commanding role of the Railways Ministry, which has prime responsibility for strategy, planning and financing projects, and managing rail services, the World Bank said.

'In China, the Ministry of Railways absorbs virtually all project and financing risks in major railway projects. This heady confluence of responsibility, power and resources has created a goal-driven culture.

'Some critics believe this concentration of power in the Ministry of Railways and fixation on speed of project delivery may have sometimes led to insufficient quality and safety, in the absence of an independent authority.'

The report added that the fatal high-speed train crash near Wenzhou city in July last year led some observers to doubt whether such challenging schedules could be maintained 'without diminution of quality and reliability'.