Transport and logistics

Alstom foresees rapid growth in China as cities with million-plus residents build metros

While 150 cities in China have more than a million inhabitants there are just 40 urban rail systems, leaving massive shortfall

PUBLISHED : Thursday, 05 January, 2017, 7:34pm
UPDATED : Thursday, 05 January, 2017, 10:34pm

French transport multinational Alstom, a key player in China’s rail system development, said China’s metro network had yet to keep up with fast-growing demand and the firm was betting on it for growth.

Alstom also helped Hong Kong build its first driverless subway train which launched last month.

“If you have a city with more than one million people, you need a metro system,” senior vice-president Asia-Pacific for Alstom Jean-Francois Beaudoin told the Post.

In China, there were about 150 cities with more than one million residents, but only about 40 cities had metro projects approved; “the market potential is huge,” he said.

Currently two-thirds of Alstom’s contracts in Asia by number are from projects in China.

As one of the first western companies to enter China back in the 1950s, Alstom has been active in both railway and urban transit and provides a wide range of solutions from trains, infrastructure and signalling systems to maintenance, through five joint ventures with Chinese state-owned companies.

Despite the Chinese economy slowing down the railway infrastructure business was still significantly growing, Beaudoin said, given the increase of population and its fast pace of urbanisation.

The company would focus on supplying traction and signalling systems in China, he said.

“We hope to grow as fast as the market.”

China has pledged to double its urban rail length from current level to 6,000 kilometres, and extend its high-speed railway from 19,000km to 30,000km by 2020.

Beaudoin said the increasing competition from China’s self-developed technologies was unavoidable but the French company had advantages in its international footprint, all-round services and ability to provide eco-friendly solutions.

The company, which was established in 1928 and operates in 70 countries, is also the market leader in automated metro world.

As early as in 2003, Alstom delivered trains and signalling systems for Singapore’s North East Line, the first driverless metro system in the country.

Alstom has participated in the first driverless metro in Shanghai. Most recently, it designed a signalling system for Hong Kong’s first fully automatic subway train — South Island Line, which started service last month.

Beaudoin said there was a “significant market trend of developing driverless trains” as it saved substantial costs and could help decrease distance between trains, meeting the needs of big-city metros which sought to carry more passengers.

Besides China, Beaudoin said the company was also very positive on the Indian market as the country had started building a modern railway infrastructure much later.

Alstom won a contract worth about US$3 billion in 2015 to supply 800 electric locomotives to Indian Railways and set up a local manufacturing plant, the second largest contact in its history.