Guangdong aims to open up province with railway programme

Network set to open province's less developed areas to investment, but costs will be huge

PUBLISHED : Sunday, 29 December, 2013, 5:04am
UPDATED : Sunday, 29 December, 2013, 5:04am

A railway construction boom in Guangdong will help boost the economy by opening up more deprived areas to investment and improving links between cities in the province, experts said.

But the huge cost of the projects may pose a major challenge for the already debt-laden province, an analyst warned.

The high-speed line between Xiamen and Shenzhen will be the first to link two well-developed economic zones: the Pearl River Delta and the west side of the Taiwan Strait in Fujian province, said Peng Peng , a researcher at the Guangzhou Academy of Social Sciences.

"The line, which goes through southeastern coastal cities, will redefine the role of Guangdong's eastern area that has long been an economic backwater." The east of the province has suffered because of its poor rail and transport links, Peng said.

The new route forms part of the province's ambitious railway-expansion plan. Lines linking the province to Guizhou , Guangxi and Jiangxi are all due to be completed next year.

Guangdong's Development and Reform Commission said in August that all cities in the province would also be connected with high-speed or fast rail lines by 2020.

This network will make it possible for anyone living in the province's remote east, north and west to travel to cities in the Pearl River Delta within 2½ hours.

"This will make people more willing to travel between the booming delta area and relatively poor regions in the east, north and west, and possibly bring in more investment," Peng said.

Guangdong is also building 17 inter-city railway projects in the Pearl River Delta, which will be completed by 2015. The 386-kilometre rail network will shorten travel time between any two cities in the area to one hour.

Guangdong's plan could build economic corridors attracting businesses along the lines, and this has already been seen on the rail link between Guangzhou and Wuhan in Hubei, Peng said.

Long Yongtu , a former vice-minister of foreign trade, told a recent forum in Guangzhou that the high-speed line between that city and Guiyang , the capital of Guizhou, would open up the poor inland province to the outside world.

A World Bank report released this year estimated that the high-speed railway between Guangzhou and Nanning , the capital of Guangxi, would generate 99 billion yuan (HK$125 billion) over the next 30 years, comprising 50 billion yuan in benefits including shorter journey times and lower train-operating costs, plus 49 billion yuan of broader economic gains.

The question that remains to be answered, according to Peng, is where the funding will come from for the huge infrastructure projects. Mainland media reports estimate Guangdong will need at least 300 billion yuan to build the high-speed rail links.

"The Guangdong authorities may have to pin their hopes on rising land prices to raise money, as the central authorities are tightening their grip on local government debt," he said.

As of the end of 2010, Guangdong had piled up debts of 750.29 billion yuan, according to the latest official figures available.