SINORAILS Development, a subsidiary under the Ministry of Railways (MOR), is planning to set up a second container transport network linking China and Hong Kong next year, according to its president Zhong Chongben. The network, starting at Zhengzhou in Henan province, would be different from the existing railway delivery service operated by the China Railway Transportation Company, also a subsidiary of MOR, which delivers containers directly to Hong Kong by rail. Sinorails planned to set up a warehousing base in Hua Xian in Guangdong province, where the Guangzhou airport would be located, as a distribution point, Mr Zhong said. 'The containers would first reach Guangdong and we are considering three different ways of delivering them to Hong Kong: by ship, by trucks or by train.' But the company was still considering which mode to use after the cargoes reached Guangdong, he said. The company was negotiating with overseas firms to form a joint venture to invest in the warehousing base amounting to US$10 million in which Sinorail would hold a 51 per cent stake, he added. Mr Zhong admitted there would be competition between the two MOR subsidiaries. But the capacity of railway transport would be greatly enhanced after the new railway, running through Beijing and Hong Kong, started operating next year and the huge demand for container delivery services in southern China would be able to bring profit to the project, he said. The project was part of the plan for Sinorail Intermodal Transporation Company (SITC), a company formed by Sinorails, Sinotrans and China Ocean Shipping Company (COSCO) last month, to establish the first door-to-door cargo delivery service in China by combining different transportation means. Mr Zhong said SITC would seek a foreign partner after details of the project were approved by the Beijing government. It was also negotiating with United Parcel Service (UPS) on a management contract for the project, he said. The first container delivery service line between Tianjin and Zhengzhou would start operating by the end of this year. And the company was planning to extend the network to Xian, Shanghai, Wuhan, Cheungdu, Chengsha and Guangdong by next year. Warehousing bases similar to that in Hua Xian would also be built in Tianjin, Zhengzhou and Shanghai, Mr Zhong said.