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The Chinese company which won the $2.3 billion contract to build Melbourne's new train fleet is central to President Xi Jinping's controversial Belt and Road Initiative and was recently blacklisted by the US government due to the security risks posed by its ties to the Chinese government.
CRRC Changchun Railway Vehicles, which beat local bids in 2016 to win the contract to build 65 new high-capacity metro trains, is a subsidiary of major Chinese state-owned rolling stock manufacturer CRRC and has been identified as a beneficiary of Uighur labour.
Daniel Andrews unveiled the new CRRC trains at Downer's Newport facility in 2018.CREDIT:JUSTIN MCMANUS
The news comes after fresh scrutiny on the Victorian government's dealings with the Chinese government with the revelation that Premier Daniel Andrews last year advertised the state as being "China's gateway to Australia".
The train project, which is more than 18 months behind schedule, was signed a week before Mr Andrews travelled to China in September 2016. Three years later, when the Premier sought more Chinese investment and gave his official endorsement to the BRI, China's expansionist infrastructure policy, the deal was held up as an exemplar.
But CRRC has been flagged by the US Defence Department as a potential cyber-security threat through its involvement in critical infrastructure. It was also listed in a March report from the Australian Strategic Policy Institute as one of 82 companies directly or indirectly benefiting from the use of Uighur workers through potentially abusive labour programs.
The report found KTK Group, a supplier to CRRC, began using Uighur labour in 2019 at one of its Chinese factories. The Victorian government has sought assurances from the company that it is not benefiting from exploited labour.
A train chassis with CRRC livery at Downer EDI's Newport facility.CREDIT:CHRIS HOPKINS
An Age and Sydney Morning Herald investigation has also found the Andrews government hired a person who had recently worked for Downer, which is part of the Evolution Rail consortium with CRRC, to play a key role in the tender process in 2015. Just months after CRRC and Downer won the bid in 2016, the official went back to work for Downer, raising questions about the impartiality of the tender process.
A national champion
CRRC, now the largest rolling stock manufacturer in the world, was established in 2015 after two of China's biggest rail firms merged to create a national export champion. It turned over more than $44 billion in 2018 and employs about 180,000 workers at more than 40 subsidiaries.
Beijing's "Made in China 2025" policy lists 10 industries in which China seeks to become the global leader. At number six is rail equipment and CRRC is central to that ambition. The company is developing bullet trains for BRI signatory countries and has been involved in dozens of projects in BRI nations including Pakistan, Iran, Italy and Turkey.
In a 2018 CRRC report, in a section titled, "Promote the Interconnection of the World", the company said it "responded positively to the Belt and Road Initiative … from the traditional export markets of Asia, Africa and Latin America to Europe, the United States and Australia". The second project listed in the report was the Victorian train deal.
Though the Victorian government did not sign up to the BRI until 2018, it had embarked on its "China Strategy" in April 2016 which set targets for trade and strategic cooperation. The state government announced that CRRC won the contract on September 12, 2016, a week before Mr Andrews' 2016 trip to China to discuss with top Chinese officials the government's China Strategy and transport investment.
Mr Andrews signed a memorandum of understanding for the BRI deal in 2018 and officially signed up to the program in October 2019 in Beijing. In the October trip, he met with leaders of local infrastructure firms including CRRC. Speaking notes prepared for the Premier's address to a delegation stated: "I see Chinese companies establishing a presence in Victoria and actively bidding for Victorian projects as essential."
"You will find the Victorian market accessible, and my government will welcome your participation and do what it can to facilitate success. My government is dedicated to this effort, and I will personally continue to share the opportunities present in my state's infrastructure agenda".
This article first appeared on www.smh.com.au
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