Tag Archives: Paul Amos

Building China’s Railways: That Was Quick

Photo taken on Aug. 1, 2008 shows a bullet train runs through the Yangcun Bridge of the Beijing-Tianjin Express Line in north China's Tianjin Municipality.  (Xinhua/Yuan Ruilun)

China Transport Topics, published by the World Bank, are like buses. Nothing for a while, then two come along at once. This Bystander had barely digested No. 4, High-Speed Rail: The First Three Years, when No. 3 dropped in our in-box, Fast and Focused: Building China’s Railways by John Scales, Jitendra Sondhi and Paul Amos of the Bank’s Beijing office. This seeks to address a basic question about the world’s largest national railway build out for more than a century, how has China managed to build such an astonishing number of large and complex railway projects so much faster than any other country. A new rail line that might take 5-6 years from Beijing’s approval to system commissioning would typically take 7-15 years in almost any other country.

The authors’ answers to their core question boil down to three dominant factors:

  • the concentration of responsibility, power and access to resources in one organization, the Ministry of Railways;
  • strong technical capacity and processes; and
  • a program effect that delivers economies of standardization and scale.

Transport and project management geeks will enjoy delving into the detail the authors provide around their first two factors, but we find the third, the program effect, more interesting. Building railways in China has become routine. The sheer scale of the various projects both individually and collectively has all involved confident that long-term development of China’s railways will continue. That, in turn, the authors say, has “led to a huge increase in the capacity of the industry, from technical institutes through to contractors, manufacturers, service suppliers and many others.”

How transferable China’s experience in railway building is to other countries is moot. Few countries follow the model of an omnipotent and omnipresent railways ministry (and one of the authors has suggested in another paper that its time might be passing). Few countries, also, have the resources and need to develop a rail network on the scale China committed to with the Mid and Long-Term Plan it laid out in 2004 (see map). Technical capacity can be acquired, though. It is also worth noting that the great railway expansions in Europe and North America in the 19th century delivered new lines at about the same pace as China is doing today.

The big unanswered question, as the authors note, is “whether the sheer speed of implementation has adversely affected the overall life-cycle costs and reliability of project infrastructure.” In the wake of both the Wenzhou high-speed train crash and the winding down of the post-2008 stimulus, the pace of investment in railways is being reined in while those questions are assessed. Yet from here on, the main determinant of the pace of railway development in China may not be structural, but old-fashioned finance. With what has been built so far struggling to break even and GDP growth set to slow in the long-term, will China still be able to afford to add to the boxcars of rail debt it already has?

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No Way To Run A Railroad

Eight countries–Australia, Brazil, Canada, France, Germany, Japan, Russia and the U.S.–account for two-thirds of the railway traffic in the world outside China. Each runs their rail system in broadly the same way: a transport ministry with multi-modal responsibilities for coordinating transport; separation of rail policy and regulation from operating services; division of freight and passenger rail; and services delivered by companies, whether private or state-owned.

China is different. The transport ministry has no mandate over rail; that is the responsibility of the railways ministry which both makes policy and operates virtually all services through 18 regional rail authorities. They are part of the ministry, not even state-owned companies, and operate both passenger and freight services. The result is a ministry monopoly over both policy-making and the administration of the railways. In the guise of China Rail, the ministry accounts for 99% of passenger kilometers travelled and 94% of freight tonne kilometers.

A new paper by Paul Amos and Richard Bullock, two transport consultants, published by the World Bank’s Beijing’s office raises the question of whether it is time for China’s system to fall more in line with the rest of the world. Not because the existing system has failed to deliver. Despite some spectacular missteps around high-speed rail, the railways ministry has given China the world’s busiest passenger rail system–it will carry and estimated 235 million passengers during the coming Spring Festival–and second busiest freight network.

Amos and Bullock’s argument for change is instead that the market for transport has changed. Road, inland shipping and air services have improved immeasurably over the past two decades, and are taking market share from rail. Those new competitors are mostly companies, not other government departments. Second, China’s rail system is now of a size where it is too big to be run efficiently as a unitary system. Amos and Bullock note that if China Rail was split into five equal regional operating companies, each would be among the world’s ten busiest rail systems. Third, if China is to make the most of all the transport infrastructure it has built over the past two decades, and that to come, it needs to integrate and coordinate road, rail and internal air and shipping with the sort of national transport strategy that is common in other countries.

Amos and Bullock propose creating a transport ministry responsible for policy across all means of transport. A national railway administration within the transport ministry would be responsible for railways regulation and long-term policy, but not services. Those would be run by a number of large, autonomous regionally-based operating companies, either privately or state-owned, along with smaller specialist inter-regional services and industrial railways such as those that now carry coal and other natural resources.

That would all make the management of China’s rail system look a lot like that of the other big railway nations. Breaking up the railways ministry, and disrupting all the vested interests that it has cultivated over the past half century, would be a huge political undertaking. Yet in the wake of the corruption scandals around the high-speed rail build-out and the Wenzhou accident, the railways ministry may be more vulnerable to dismantling than ever before.

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