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The First Deal of China's High-speed Railway "Going Out" Has Been Finalized.
addtime:2015-06-24click:119


Recently, China Railway Eryuan Engineering Group Co., Ltd. (CREEC), a subsidiary of China Railway Corporation, and a Russian enterprise formed a consortium to sign the "Contract for Surveying, Regional Land Surveying and Design, and Preparation of Design Documents for Construction of the Moscow-Kazan Section of the High-Speed Railway Trunk Line 'Moscow-Kazan-Yekaterinburg'."

An engineer from CSR Zhuzhou Institute of Technology, a subsidiary of CRRC, told 21st Century Business Herald that previously, Chinese domestic railway companies, including China Railway, China Railway Construction, and CRRC, have obtained numerous overseas engineering, locomotive, and operation and maintenance orders. However, the award of the Moscow-Kazan high-speed railway project marks the first true deal of China's high-speed railway going out, "because its maximum design speed is 400 km/h, which even exceeds the speed of domestic high-speed railways in China. Of course, this is only for engineering surveying, measurement and design, and construction design document preparation. Next, there will be more important events, namely the bidding for construction engineering and CRH trainsets. If Chinese companies can win the bids for the latter two, then the first deal of China's high-speed railway going out can be considered a complete success."

Public information shows that the Moscow-Kazan high-speed railway project is a planned initiative of the Russian government. According to the plan, this high-speed railway project spans 770 kilometers and has a total investment of 1.068 trillion rubles (approximately $19.5 billion). Upon completion, the travel time from Moscow to Kazan will be reduced from the current 14 hours to 3.5 hours.

Wang Mengshu, academician of the Chinese Academy of Engineering and deputy chief engineer of China Railway Tunnel Group, said that the execution period of the contract signed by China Railway this time is from 2015 to 2016. Once the design is completed, Russia will proceed with bidding for the actual construction projects of this railway.

Yakunin, president of Russian Railways, said that Chinese railway builders have the potential to sign this huge contract, but it is not yet a certainty. Yakunin stated that companies participating in the design naturally have an advantage, which is obvious. However, he noted that the final decision will not be based on the companies participating in the design, but on the financing, loans, and other guarantee conditions provided by the bidders. He said that after the completion of the design work, tenders for construction will be conducted.

Wang Mengshu noted that the construction of medium and short-distance high-speed railways in Russia, including the Moscow-Kazan high-speed railway, requires crossing swamps and high-cold regions, which places high demands on construction technology. In this regard, domestic railway builders, including China Railway and China Railway Construction, have accumulated rich experience.

Wang Mengshu believes that "since China began constructing its first high-speed railway in 2008, high-speed railways have spread across regions from Harbin in the north to Hainan in the south, from the Yangtze River Delta in the east to Xinjiang in the west. Regions with climates and terrains similar to Russia are Northeast and Northwest China. China has successfully operated the Harbin-Dalian high-speed railway for many years, and some sections of the Lanzhou-Xinjiang high-speed railway have also begun operation. It should be said that whether it is infrastructure construction or the operation of CRH trainsets, Chinese companies have absolute advantages in bidding for Russian high-speed railway projects."

The Moscow-Kazan high-speed railway is just a microcosm of Sino-Russian high-speed railway cooperation. Russia has ambitious plans for building high-speed railways. To meet the needs of future economic development and as an important infrastructure investment project currently driving Russia's economic growth, Russia's high-speed railway construction has truly entered the acceleration stage since 2013. The first high-speed railway in Russia, the Sochi high-speed railway, was completed and opened to traffic in this year. According to Russia's railway transportation development strategy by 2030, Russia intends to build 20,000 kilometers of new railways, including 5,000 kilometers of high-speed railways.

There are mainly three planned high-speed railway projects in Russia: First, the Moscow-St. Petersburg high-speed railway project (High-Speed Railway Line 1), with a total length of 658 kilometers and a design speed of 400 km/h, is expected to be completed by 2018. Second, the Moscow-Yekaterinburg high-speed railway project (High-Speed Railway Line 2), with a total length of 1,595 kilometers, will prioritize the construction of the Moscow-Kazan section. Third, the Moscow-Sochi high-speed railway project, which departs from Moscow via Rostov-on-Don to Sochi. Upon completion, the entire journey by train will be reduced to 8 hours, which will strongly promote the development of local tourism. The Sochi high-speed railway opened to traffic in 2013 is part of the Moscow-Sochi high-speed railway project.

The aforementioned engineer from CSR Zhuzhou Institute of Technology told 21st Century Business Herald that if Chinese companies can successfully compete for subsequent stages of the Moscow-Kazan high-speed railway project, it will have far-reaching significance for the future entry of Chinese companies into the Russian high-speed railway market.