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China's construction of a vast high-speed rail network will bequeath it one of the world's most advanced rail industries, but it needs to keep a close eye on the debts it is running up in the process, the World Bank said on Wednesday.
China plans to build 13,000 km of high-speed rail lines by 2012, more than the rest of the world combined. Trains will travel at a maximum speed of 350 km an hour on 8,000 km of the track and at 250 km an hour on the rest. The Beijing-Shanghai line due to open next year will halve the travel time between the two cities to 5 hours.
By 2020 the network will have expanded to 16,000 km, serving more than 90 per cent of the population, at a total budgeted cost of 2 trillion yuan ($326 billion), according to the government's blueprint.
Li Jun, head of the railway ministry's general affairs department, told reporters that the target was likely to rise as the government draws up a more detailed economic plan for the next five years.
China is building a fleet of state-of-the-art trains for the network with the help of foreign firms including Bombardier, Siemens, Kawasaki Heavy Industries and Alstom .
"This transfer of technology and know-how, together with the experience of building and operating several thousand route-kilometres of high-speed railway, will make China's one of the most advanced railway industries in the world.
"This should position the country to compete internationally when other countries adopt high-speed railways," the World Bank said in a report.
It likened the creation of the network to the building of the Interstate highway system, which knitted the United States together half a century ago, and said the benefits would accrue not just to passengers.
"Just as importantly, the new high-speed lines will release much-needed capacity for growing freight traffic on China's existing lines," it said.
Looking at the lessons for other countries, the bank said the high population density of eastern China, rapidly growing incomes and the prevalence of many large cities in reasonable proximity to one another created favourable conditions not found in most developing countries.
Nor could all countries make the vast political and economic commitment that a decades-long programme requires.
And then there are the financial costs.
"Even in China, the sustainability of railway debt arising from the programme as it proceeds will need to be closely monitored and payback periods will not be short, as they cannot be for such 'lumpy' and long-lived assets," the report said.
"Governments contemplating the benefits of a new high-speed railway, whether procured by public or private or combined public-private project structures, should also contemplate the near-certainty of copious and continuing budget support for the debt," it added.
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