AFTER German Chancellor Helmut Kohl walked away from Beijing last month with a bag full of multi-million dollar transport contracts, the Austrian Government thought it had a good chance of jumping on to China's transport bandwagon. Austrian government officials presented a list of rail projects to the railway ministry for discussion. However, the response was not quite what they expected. After studying the proposals, ministry officials said that, although the projects looked interesting, they would not be able to go ahead even if the Austrian Government came up with a comprehensive concessionary finance package to cover the entire cost of the schemes. The ministry did not have the money to pay for the projects and officials hinted that the only way Austria could possibly clinch the contracts was by donating the equipment and technology involved. ''They were basically asking for presents,'' a source close to the negotiations said. China has made grandiose pronouncements that it will invest more than US$140 billion in transport projects by 2000. But the reality is somewhat different. Ambitious transport schemes will only go ahead when the capital becomes available. Given the fact that the Government is continuing to run a huge budget deficit, that is not going to happen soon. About the only way foreign companies will be able to get a piece of the action, as the Austrians discovered, is by virtually giving their products away. Even the 700 million deutschemark (about HK$3.14 billion) Guangzhou underground railway project, which was supposed to be a reward to the German Government for its conciliatory policies towards China, was only secured after Bonn agreed to provide a 351 million mark soft-loan package to cover most of the costs. German Minister for Economic Co-operation Carl-Dieter Spranger tried to defend the soft loan to China's richest city by saying the project was ''environmentally friendly'' and would ''help people'', and therefore met the broad guidelines for the grantingof development aid. But it was clear that the concessionary finance was the price the Germans had to pay to get its companies the work they needed. The cost of winning the next big rail project - the planned high-speed rail link between Beijing and Shanghai - could be even higher, if the project ever gets underway. The China Daily newspaper reported last week that foreign companies were intensifying their bidding for the US$10 billion project. A German consortium of AEG, Siemens and Deutsche Waggonbau has offered to conduct a feasibility study free for the Railway Ministry, and French banks are gearing up to support the bid from the makers of the TGV fast train. But the project is unlikely to get even central government approval until the Guangzhou to Shenzhen high-speed rail link has been fully electrified and tested - which is not expected for another four years. Companies hoping to win the contract will have to keep up their expensive lobbying efforts for that entire period, even though there is no guarantee that the Beijing-Shanghai express will become a reality. Everyone agrees that China desperately needs more railways if it is to maintain its phenomenal economic growth of the last 10 years, but the question remains - where is it going to get the money to pay for them?