Catalog

Railway on Track

By Graham Dwyer (gdwyer@adb.org)
External Relations Specialist

Background

Improved Beijing-to-Kowloon railway gets high marks for helping the poor.

MANILA, PHILIPPINES When the Asian Development Bank (ADB) approved a $200 million loan in 1994 for a vital 2,500- kilometer (km) railway link from Beijing to Kowloon, the priority was to remove transport infrastructure bottlenecks to economic growth in the People’s Republic of China (PRC).

Nine years later, the project for the Jing- Jiu Railway has largely achieved its development objectives, while also contributing to ADB’s goal of poverty reduction.

“Even though poverty reduction was not an explicit objective of this project, it has had a major impact on stimulating economic development and reducing poverty in some of PRC’s poorest counties,” says Chang Ching Yu, an ADB Evaluation Specialist.

“In providing a fast and reliable railway link between two key destinations, it is helping narrow the gap between the relatively developed coastal provinces and the less developed interior.”

Travel times between Nanchang, capital of Jiangxi Province, and Beijing, Shanghai, and Guangzhou have been cut down drastically from about 24 hours to less than 12 hours. Strikingly, travel between Ganzhou, the second largest city of Jiangxi, and Nanchang about 400 km away, has been reduced from over 12 hours to 4–5 hours.

Construction on the $5.3 billion railway began in January 1993, with the route originating in Beijing and running through seven provinces to terminate in Kowloon, in Hong Kong, China.

The ADB loan enabled the railway to receive new technology, such as signaling and telecommunications equipment, operation systems, track maintenance, and special heat-treated and hardened rails, expected to last 30% to 50% longer than regular tracks.

The project also promoted policy reforms, along with a more commercial approach and more efficient financial management.

A recent evaluation by an ADB team that visited Beijing, Guangdong, and Jiangxi provinces gave the project high marks.

The improved track and high-tech equipment led to a faster and more efficient train service. Express trains typically run at between 120 km per hour (kph) and 140 kph, compared with an average speed of 60 kph for trains in the PRC in 1999.

The economic impacts in stimulating development and reducing poverty in the provinces along the railway have been significant.

“The railway provides, at lower cost, access to outside markets for local agricultural and mining products, while stimulating external investments,” says Mr. Yu, who led the evaluation team. “It has also allowed rural surplus labor to work in richer Guangdong Province and has thereby significantly boosted rural incomes.”

The seven counties along the railway in Ganzhou, for instance, experienced faster growth than the province as a whole, with the impact strongest in urban areas.

The railway also captured a significant amount of traffic, particularly passengers, helping ease congestion on alternative lines.

“There are many institutional reforms still to be carried out, particularly in accounting systems and separating the government function from its commercial operations,” Mr. Yu notes.

“But already this project is proving that railway project that is well designed, maintained, and managed can reduce poverty”.

The project was also completed months ahead of schedule. ADB’s financing was kept to below $194 million, resulting in loan savings of over $6 million.

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