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Rail freight bottlenecks to continue 
Last Updated(Beijing Time):2004-11-24 10:36

China's chronic railway bottlenecks, which had caused long delays in deliveries of coal, iron ore and oil, were expected to continue next year even as the country's economic growth slows, analysts said.

There was no quick fix to the drastic shortage of freight cars and an inadequate railway network, they said.

"The real trouble is that railway construction in past years has failed to match the rapid growth of the country's economy," said Wang Derong, executive president of the China Communications Transportation Association.

"Although economic growth next year is expected to fall, insufficient railway capacity is still far from meeting increased demands. It's a problem that cannot be resolved in the short-term."

China's economic growth for 2004 is expected to top 9 percent but could slow to 8-8.5 percent next year, according to economists.

Investment in the railway sector rose a meagre 2.1 percent year on year in the first nine months, compared with a 9.5 percent increase in gross domestic product over the same period, the State Council Development Research Center said recently.

Between January and September, the railway system transported 1.61 billion tons of cargo, up 9 percent year on year, but met only about one-third of demand, domestic media reported this month.

The bottlenecks have delayed the delivery of coal for electricity, which led to 24 provinces suffering power shortages last summer.

To tackle the problem, China is planning to extend its railway network to 100,000 kilometers from the current 73,000 kilometers by 2020, which will require an investment of 100 billion yuan (US$12 billion) a year, according to domestic media.

But even if the government significantly increased spending in the sector, the impact would not be felt for many years, said Wang, noting that it took time to build a major railway line.

Wang expects the railway bottleneck to worsen next year with no real improvement for another 10 years.

Guo Xiaobei, deputy director of the Institute of Comprehensive Transportation under the National Development and Reform Commission, said it was too early to predict when the shortage of railway cars would end.

China's truck industry, on the other hand, has an oversupply of vehicles due to the low barriers to entry.

"There is enough trucking capacity at present. Almost one-third of the trucks running on the roads are empty as they return from their delivery trips," said an official from the highway department of the Ministry of Communications.

Domestic media have previously said one reason for the excess capacity in the sector may be that companies are being discouraged by high expressway tolls.

Authorities had also eased congestion at the country's major ports by diverting more railway cars to transport coal, Wang Mingzhi, director of the Department of Water Transport at the Ministry of Communications, said.

Thermal coal is now being transported to the power stations as soon as it arrives at port.

While some ships still needed to wait at ports because of the railway capacity shortage, thermal coal was usually moved away as soon as it arrived, Wang said.

"But as railway capacity goes to transport coal, imported iron ore is often delayed at the ports," Wang said.

A company official at Rizhao Port, a major dry-bulk port in northern China, said that around three million metric tons of iron ore had been stored there since the end of last year.

Millions more tons of iron ore is stockpiled at other ports.

Wang urged the government to invest more in the regional river transport networks as an alternative to rail and road.

He said China's inland waterway resources were among the richest in the world, but the government had invested less in the sector than other forms of transport.

"We are not making full use of the inland waterway transport networks, which are now very developed in Europe and America. And transport using the rivers can serve to save money and protect the environment," he said.


Source:Shenzhen Daily 
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