The World Bank's Board of Executive Directors approved on Thursday two loans each of US$200 million to the People's Republic of China to help finance the Second National Railways Project and the Hubei Shiman Highway Project, which will address the infrastructure challenges of connecting eastern provinces to central and western China through the improvement of the so called Zhe-Gan line and the construction of the Hubei Shiman Expressway.

Despite China's accomplishments in reducing poverty in the past 20 years, economic growth has not been equally distributed among China's regions and the per capita income in the 12 western and central provinces is less than half that in the coastal provinces. Both infrastructure projects will help the Chinese government in its goal to combat isolation in western and central regions, both of which suffer from poor accessibility, aggravating income inequality.

The performance of China's rail system is very good, the Chinese government has adopted strategic goals for the national railway system to make it more responsive to market needs and aims at expanding the size of the rail network, speed up railway construction in western China and add capacity in the main corridors of the eastern network. Nevertheless, in order to remain competitive in the future it needs to expand its capacity further, to keep raising the quality of services, and to acquire modern technology.

"During the past 20 years fast growth in China caused significant increase of both passenger and freight traffic, creating a need for an appropriate road network", said the World Bank manager for the Hubei Shiman Highway Project, Michel Bellier. "The length of Chinese highways has doubled since 1980 but the highway network remains one of the sparsest in the world; and the lack of capacity on a series of major inter-provincial trade corridors is one of the reason why the benefits of rapid economic growth have not been distributed equally among eastern, central and western areas of China," he added.

The Zhe-Gan line between Hangzhou in Zhejiang Province near Shanghai and Zhuzhou in central China's Hunan province is the only existing major east-west link connecting the coastal regions in the Yangtze River Delta in the East to the industrial region in the center of China through to Chongqing and Chengdu in the West and Kunming in the southwest.

Similarly, Hubei is a communication node for north-south and east-west traffic and a gateway to the less developed western provinces. Despite significant investment in the construction of new highways, funding is still insufficient to meet demand for both construction and maintenance.

The Second National Railways Project has three components:

• Improvements to the Zhe-Gan line that will raise the maximum speed from 120 km/h to 200 km/h, improving signaling and communications, and electrification.
• Modernization of track maintenance technology by upgrading the quality of track maintenance on heavily used portions of China Railways' network.
• Advisory services to strengthen the Ministry of Railways' planning, management and technology capacity.

The Hubei Shiman Highway Project has three components:

• Improvement of the highway capacity in northwestern Hubei Province with the construction of the Shiyan- Manchuangan expressway.
• Improvement of the local road program will enhance people's mobility and ability to access education, health and other social services in remote low-income areas of the Hubei Province. Thereby competitiveness of the local economy will be improved and socioeconomic benefits to roadside communities enhanced.
• Strengthening governance and policy development and road safety by adopting more efficient practices to manage the road network better.

By the time the Second National Railways Project is completed in 2008 customers on the Zhe-Gan railway line will benefit from a cut in travel time end to end by 3-4 hours. The line capacity will be increased by 13 percent and weight of freight trains will be raised from 3,300 tons to 4,000 tons. It is also expected that improvement of transport services will encourage economic growth in the region by attracting new manufacturing industries. Finally environment pollution will be reduced significantly by the switch from diesel traction to electric.

The Hubei Shiman Highway Project is to be completed in 2008. Road users in the Shiyan - Manchuangan corridor will be the main beneficiaries. Expected improvements in the quality of local roads will lead to lower transport costs throughout the province and lower life-cycle costs for road maintenance. Adopting more efficient practices for managing the roads will promote effective use of public funds, thereby enhancing the contribution of the highway network to economic development and its responsiveness to social needs. Finally, the road traffic safety initiatives will reduce accident rates, thereby saving lives and addressing negative road impacts.

(China.org.cn June 25, 2004)