Mainland authorities have given storage rivals Hitachi Data Systems (HDS) and EMC the green light to help upgrade the data-storage facilities of the country's railway network. The two companies are vying for contracts to supply advanced storage systems that will replace outdated infrastructure used in 14 railway bureaus and more than 44 large railway stations across the mainland. The deal between the Ministry of Railways and the two storage-system vendors was forged in November, following a stringent selection process by the agency. HDS and EMC are to compete for contracts in each of the provinces where the ministry handles passenger ticket bookings for China's largest transport operation. The new storage hardware will replace the existing IBM RS6000, Hewlett-Packard HP9000 and Compaq Computer Unix servers and other low-end systems used by the ministry's network of bureaus and stations. All these supply contracts were to be awarded this year, according to David Wong, HDS country manager for the mainland. Executives heading EMC's mainland operation were unavailable for comment. Mr Wong declined to reveal the estimated investment figures for the ministry's storage system infrastructure. Depending on their configuration, pricing for the enterprise-class Lightning system from HDS and EMC's Symmetrix line can reach the multi-million-dollar range. Storage systems used at the ministry's network of bureaus and stations are also expected to include mid-tier hardware comprising HDS' Thunder and EMC's Clariion, a product that Dell Computer also resells. EMC leads HDS in the number of ministry contracts it has won, according to industry sources. Massachusetts-based EMC has about 100 marketing staff focused on securing ministry supply contracts. By comparison, HDS has about 20 staff working on the project, as the company only started its marketing push in the mainland six months ago. Mr Wong said: 'We have clinched contracts to supply our Thunder 9200 and Lightning 9910 systems to the Ministry of Railways. 'We are working hard to secure more contracts over the next few months.' He said the HDS contracts arose from ministry operations in Hubei and Yunnan provinces and in Inner Mongolia. The ministry storage-system upgrade programme is a showcase for the capabilities of EMC and HDS products because of the scale of China's railway operations. During the Lunar New Year holiday period, 130 million people travelled by train - about three million more than in the same period last year, the ministry said. An average of 10 billion people a year travel by train in China, according to ministry statistics. The deal is crucial for both companies because it can potentially generate more lucrative storage-supply contracts in China's fast-developing communications sector. In December 2000, the ministry's former telecommunications unit, Railcom, was spun off to become a nationwide communications network operator. Railcom now operates the country's second-largest fixed communications network, after China Telecom. Instead of starting from scratch, it expanded the number of networks that form part of the mainland's railways communications infrastructure. The ministry is also one of the founding agencies of China Netcom, a facilities-based broadband telecommunications operator. Its comprehensive collection of telecoms licences, including one to operate international gateways out of China, puts it on a level with incumbent operators such as China Telecom. China Netcom was founded in 1999 by the Chinese Academy of Sciences, the Ministry of Railways, the Shanghai municipal government and the State Administration of Radio, Film and Television. HDS, a subsidiary of Japanese electronics giant Hitachi, has emerged over the past few years as an aggressive competitor of storage-systems market leader EMC. The Lightning system, which HDS says has more advanced storage technologies than EMC's Symmetrix product, is also resold under other brand names by HP, Compaq and SGI. Despite tough competition and the recent economic downturn, EMC has managed to maintain its position as the world's No 1 provider of external storage systems, according to research firm International Data Corp (IDC). In the past several months, both HDS and EMC have focused their attention on generating more business in the global market for networked storage systems. IDC earlier predicted this market would grow to US$8.1 billion last year from US$7.5 billion in 2000.