Guangzhou Metro Corp (GMC), the government-owned transportation company responsible for building the city's subway system, will launch a landmark bidding process for passenger trains to run on the city's second metro line. Invitations to tender for 26 trains, involving contracts worth millions of dollars, is scheduled to start on Thursday. However, under central government policy aimed at localising equipment used for inner-city rail projects, GMC will invite only foreign companies with mainland-based rolling stock joint ventures and domestic co-operation agreements to participate. The move, which represents a break from previous practice, complies with State Development and Planning Commission guidelines requiring local governments to source domestically at least 70 per cent of equipment used for large municipal infrastructure projects. Guangzhou's Metro Line Two will run 23.21 kilometres from Xinzhou in Guangzhou's southeast to Baiyun International Airport in the northern suburbs when it is completed in 2003. Investment for the route has been budgeted at 11.02 billion yuan (about HK$10.24 billion), including a provision of US$139 million to buy overseas equipment. That is a substantial reduction from the 4.7 billion yuan spent on foreign equipment for the first line. How the 70 per cent rule will be put into practice remains uncertain, but GMC officials are betting that buying locally produced equipment will help cut construction costs for Line Two to 474 million yuan per kilometre, compared with 688 million yuan per kilometre for Line One, which went into operation this year. At least four transportation multinationals are expected to bid for the passenger-trains contracts, including ABB Daimler-Benz Transportation (Adtranz) and Siemens, which together built the 21 six-car trains used on Guangzhou's Line One and invested in domestic railway car and engine manufacturers. Siemens would like to continue its co-operation with the GMC, a source close to the company said. Also expected to bid, through its Qingdao-based joint venture, is Bombardier Transportation, which this month signed contracts with five railway bureaus, in Beijing, Shanghai, Guangzhou, Shenyang and Zhengzhou, for the purchase of 300 rail cars, valued at more than US$250 million. Those close to the bidding process did not expect the announced recent detention of former GMC general manager Chen Qingquan to overshadow the tender. Mr Chen is reportedly being held under suspicion of taking bribes. Tenders for the rolling stock are expected to be presented in April, with announcement of awards in May. Invitations to tender for Line Two telecommunications equipment is expected to start in January. TRANSPORT