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Eric Ng

Daqin Railway, the dominant mover of coal from Shanxi province and Inner Mongolia to coastal areas, plans to spend 17.22 billion yuan (HK$19.12 billion) buying locomotives and rail cars.
The expansion underlines surging energy demand from the prosperous coastal regions, and the need to ease the transportation bottlenecks between them and remote interior coal mines in northern China.
Daqin - which runs the main rail line between Datong, a major coal mining city, and Qinhuangdao, the nation's largest coal port - said its board  had approved proposals to buy 3,000 rail cars  for 1.65 billion yuan and 360 electric locomotives for 15.57 billion yuan.
Driven largely by a 14.4 per cent growth in power generation last year, the nation's coal railway transport volume grew 10.65 per cent to 1.38 billion tonnes in 2006.
Power plants consumed around half of the nation's 2.6 billion tonnes of coal production.
Daqin Railway aimed to transport 300 million tonnes of coal last year after moving 272.97 million tonnes in 2006 - accounting for 19.78 per cent of the  country's total by railway.
The throughput capacity will further rise to 400 million tonnes by the end of 2010, according to the central government's five-year plan for 2006-2010, which also called for the expansion of the national rail coal transport capacity to 1.8 billion tonnes from 1.3 billion tonnes in 2005.
According to a Nomura research report, coal rail capacity will rise by about 70 million tonnes this year - mostly from Daqin's expansion - far short of the estimated 184 million tonne increase in coal supply.
'We think there will be little improvement in the transport bottlenecks, at least this year,' wrote analyst Donovan Huang, adding the biggest supply gaps are seen in Central China and Shandong province.



Daqin Railway to spend 17.2b yuan on expansion