ADB to Help Prepare Rail Project for Remote Areas of Yunnan Province, PRC

News Release | 25 October 2005

MANILA, PHILIPPINES - ADB will help the Government of the People's Republic of China (PRC) to a design a project that will build railway connections to remote rural areas in Yunnan province and help promote rail safety, through a new technical assistance grant of $500,000.

The project envisages constructing about 140 km of electrified line, with 13 new railway stations, plus bridges and tunnels from Yuxi southward through the province to Mengzi, and supporting a separate additional component to promote sustainable safety systems on PRC railways. Once completed, the connection will provide the shortest link from Kunming to Hekou and connect to the proposed pan-Asian railway to Viet Nam, Cambodia, Thailand, Malaysia, Singapore, and beyond.

The TA will assist the Government to strengthen feasibility studies, firm up resettlement plans, and identify policy measures and institutional development needs to improve safety, efficiency and management, and social issues to be addressed.

The line, which would carry passenger and freight traffic, is seen as key to helping to promote the economic development and integration of the poor western region of the country, increasing access to services, and improving the standard of living.

"The proposed railway passes through an area that has remained cut off from mainstream development, due to lack of transport and the area's remoteness," says Manmohan Parkash, an ADB Transport Specialist.

"Provincial and local governments and people living the area recognize the railway as a key investment with huge potential to create jobs and income generating activities - prerequisites for reducing poverty. The rail line will provide much needed economic, reliable, and safe transport to an area that is rich in minerals, food grains, and forest produce, and has many tourist spots."

The project area includes two cities and three counties with a total population of about 3.6 million. Some 440,000 people in the rural areas live below the poverty line, many in villages without access to electricity, telephones, highways, or good drinking water.

"The Ministry of Railways is in a transition phase and is upgrading its technology and systems. The safety component will help it modernize and upgrade its existing management systems and technology to meet current and future requirements of safe, reliable train operations," says Mr. Parkash.

Despite growth in freight and passenger traffic, the capacity of the PRC rail system has lagged behind demand due to system constraints. The PRC's Tenth Five-Year Plan (2001-2005) identifies transport - including railway development - as a priority and envisages a total investment of CNY350 billion to increase the network length, electrify key lines, and increase operating speeds.

Focusing on expanding the country's rail system to unserved, less developed and poor areas, ADB has provided 13 loans totaling about $2.6 billion to finance the construction of more than 1,900 km of provincial line and 4,500 of national lines.

The total cost of the TA is about $670,000 equivalent, of which MOR will provide $170,000. It will be carried out over about five months in the first half of 2006.