The World Bank's Board of Executive Directors has recently approved two key transport loans to the People's Republic of China -- the first on March 31 for US$150 million supports the Hubei Yiba Highway Project -- and the second, approved on Friday, for US$300 million, assists in the financing of the GuiGuang Railway Project. Both projects will help meet China's growing demand for road and rail passenger and freight services and enhanced transport access to central and western areas of the country.

The GuiGuang Railway Project will help build an 857-kilometer electrified railway line between Guiyang in Guizhou Province and Guangzhou in Guangdong Province, providing for the first time a direct connection between some of the poorest areas of China and the more developed Pearl River delta region.

The new rail line will operate passenger and freight trains at speeds of up to 200 and 120 km per hour respectively. Upon completion of the project, travel time for rail passengers between Guiyang and Guangzhou will drop from the current 24 hours to just five hours. For freight, the distance travelled between the two cities will be reduced from the current 1,440 km to 820 km. The new railway line will also provide an efficient and lower-cost rail transport access to Guangzhou and Shenzhen for passengers and freight to and from the western provinces of Sichuan and Yunnan, and a high-quality logistics corridor between Kunming and the Pearl Delta ports, some 1,200 km shorter than the current one to Shanghai. In addition, the project will contribute to greater environmental sustainability as it will be more energy efficient and generate lower greenhouse gas emissions than alternative transport modes.

The total investment of the project is US$12.5 billion, with US$300 million from the World Bank.

"This project is part of the Government's economic stimulus package which is emphasizing sectors and projects like railways that will generate significant and continuing long-term benefits. This will accelerate China's development plans, increasing the annual investment in railways to US$90 billion per year over the two years of the stimulus plan," said John Scales, sector coordinator for transport in the World Bank Office in China.

The Hubei Yiba Highway Project includes the construction of an expressway, running along the northern bank of the Yangtze River from Yichang to Badong in Hubei Province in central China. This is part of the national trunk expressway network connecting the country’s eastern and western regions. The new expressway will help further strengthen regional integration and the competitiveness of Hubei Province as well as its neighboring land-locked provinces.

It includes innovative mechanisms for environmental mitigation actions and support to the Hubei Provincial Communications Department for the design and monitoring of environmental guidelines and strategies for tunnel safety, reduction of geological disasters, and transport logistics.

"These transport infrastructure investments will benefit some of the less developed and more remote areas of Central and Western China by accelerating their economic development through improved connections to the more developed coastal areas," said Aurelio Menendez, lead transport specialist. “They come at the right moment when investments in infrastructure are playing a key countercyclical role in the stimulus of the Chinese economy in response to the worldwide financial crisis."

Transport infrastructure has been an important part of the World Bank's assistance program in China, accounting for approximately 50 percent of the current portfolio. The World Bank has financed 13 railway projects and over 40 highway projects since the early 1980s.

(China Development Gateway April 17, 2009)