A US$500 million export credit from Germany is expected to seal a deal that will see construction of the mainland's first high-speed railway.
The funds will be used to buy rolling stock from Transrapid International, a German consortium comprising Thyssen Krupp, Siemens and Adtranz, for use on a 35-kilometre rail link using magnetic levitation - or maglev - technology.
The train can travel at up to 505km per hour by hovering on a magnetic field above the track and will link Pudong International Airport and the Lujiazui Financial and Trade Zone in a seven-minute journey.
Operations, beginning with four, six-car trains, are scheduled to start by 2003.
Costs are expected to exceed US$1 billion, including US$630 million for civil construction of the 35km guideway.
A project feasibility study is due on November 20, with central government final approvals expected by the middle of December. Shanghai officials have indicated they plan to start construction soon after.
'This project is not on a fast track,' said one industry source. 'It's on a maglev track.'