China Direct

Bombardier on track to deliver $453 million China rail contract

 

The locomotive manufacturer and CBI member, Bombardier has announced that it has won a $453 million contract to supply 168 high-speed train cars to China Railway Corporation (CRC).

The deal has been agreed between Bombardier’s Chinese joint venture and CRC, and it is the second order win this year to supply China’s growing high-speed network. Bombardier Sifang (Qingdao) Transportation Ltd. won a separate contract in September worth $324 million to supply 120 train cars by the end of 2018.

Bombardier launched its joint venture, Bombardier Sifang Transportation Ltd. in 1998, and the JV is 50% owned by Chinese locomotive manufacturer CRRC Sifang Locomotive & Rolling Stock Co. Ltd. In total, Bombardier’s transportation unit has six joint ventures in China and seven wholly-owned enterprises; it employs more than 7,000 people in China.

The latest contract sees Bombardier supply 168 new CR400AF Chinese standard high-speed train cars. The 168 cars will be configured into fifteen 8-car trainsets and three 16-car trainsets with an operating speed of 350 km/h.

President of Bombardier Transportation China, Jianwei Zhang said: “This repeat order comes just three months after the previous, clearly demonstrating the pace of development in the Chinese high-speed rail market as well as the trust that CRC has placed in our products and performance. We are confident that our ability to consistently meet with customers’ quality, quantity, timing and cost requirements, in combination with our focus on long-term sustainable success in China, has been key to our achievements in this fiercely- competitive market.”

Bombardier Transportation China is a full solution provider, catering to all aspects of the railway industry; from vehicles and propulsion to services and design. To date, the company has delivered more than 4,000 railway passenger cars, 580 electric locomotives and over 2,500 metro cars, monorails and trams, to cater to China’s growing urban mass transport needs. Through its joint ventures, Bombardier also provides propulsion and signalling systems to third party metro car builders for use in more than 30 Chinese cities.

The announcement comes just after Bombardier celebrated its 20^th anniversary with its joint venture partner in China, on December 5th. Bombardier Sifang Transportation opened its Qingdao factory in 1998, and has “Played a key role in the latest three generations of Chinese railway passenger trains.”

The company received its first order in November 1999, when the Ministry of Railways awarded Bombardier the tender for 300 high-grade intercity cars. This was followed by subsequent orders to supply the Qinghai-Tibet line with 182 high-altitude railcars in 2005 and an order for 400 high-speed railcars and 250 EMU sleeper cars in 2007. In 2007, Bombardier received its biggest order to date, when the Ministry of Railways commissioned 1,120 very high-speed train cars in 2009. Finally, the company won the first two contracts to supply 120 and 168 CR400AF new Chinese standard high-speed train cars for CRC in 2018 and 2019 respectively.

Please read more here.

Focus on Chengdu - CBI China Regional City Series

 

 

 Chengdu

Ambassador Woodward visits Chengdu: In November 2015, Barbara Woodward paid her first solo visit to Chengdu as British Ambassador to China. During her visit, she met with the Executive Vice Governor of Sichuan and the Mayor of Chengdu, visited the University of Electronic Science and Technology of China and delivered a speech on joint efforts to a green and low carbon future, visited West China Hospital (the second-largest hospital in China) and promised to invite more of the UK’s healthcare organisations to Go West, and participated in an Empowering Women event to share her personal experiences with female university students on her own growth and career development.

UK Chancellor visits Chengdu: In September 2015, UK Chancellor George Osborne announced a major milestone for the government’s High Speed 2 rail project (HS2), kick-starting the bidding process for phase one of the mega construction project. At least seven new contracts will be opened up to companies, with a total combined value of £11.8 billion.

The Chancellor made the announcement at an event in Chengdu, aimed at wooing some of China’s biggest investors to be part of the project as well as a raft of other major UK infrastructure projects. The Chancellor also showcased a selection of £24 billion worth of investment opportunities in the North of England at the event in Chengdu.

The Chancellor said there are unprecedented opportunities for Chinese investment into the Northern Powerhouse. Infrastructure and regeneration investment projects such as the Atlantic Gateway and Science Central, a cutting-edge development in the heart of Newcastle, were set out in a new Northern Pitchbook that was presented in Chengdu.

Other facts/figures on Chengdu and Sichuan province

Nearly 100 UK companies registered in Sichuan: There are now 94 UK companies registered and doing business in Chengdu and Sichuan province – nine of the 94 are in the world’s top 500 companies – in sectors ranging from financial and professional services, aerospace, engineering, construction, and manufacturing.

China’s fifth most populous city: Chengdu is China’s fifth most populous city 

High levels of foreign investment: In the first four months of 2015, Chengdu received US$1.2 billion in contracted foreign investment, up 150% compared to the same period in 2014.

Strong concentration of MNCs: There are over 265 Fortune 500 companies with businese in Chengdu. 

Key industries: Key industries in Chengdu include pharmaceuticals, food processing, automotive, aerospace, and metallurgy, finance, ICT, retail, petrochemical, and tourism.

Examples of CBI members in Sichuan province:  

Atkins:

 

 

In November 2015, the Seaton Plaza, Atkins’ first mixed-use development in Chengdu, opened for business.

• In June 2013, Atkins completed the landscape design for the waterfront in Mianyang, Sichuan province, creating leisure space for the public and interlinking various commercial and residential developments.
• In May 2012, Atkins was commissioned to draw up the Guidelines for the Chengdu North City Regeneration project.

 

• Benoy: In January 2014, Benoy announced the opening of Chengdu International Finance Square.

 

• BP: In October 2015, BP and China National Petroleum Corporation (CNPC), in an expansion of their global partnership, entered into a framework agreement on strategic cooperation covering potential shale gas exploration and production in the Sichuan Basin and future fuel retailing ventures in China and other international partnerships.

 

• British Airways: In 2013, British Airways launched its direct service between Chengdu and London.

 

• Deloitte: In October 2013, Deloitte opened its Chengdu office.

 

• Diageo: In July 2013, Diageo received approval from Chinese authorities to acquire the remaining 47% stake in Sichuan Chengdu Shuijingfang Group Co. Ltd. owned by its Chinese partners.

 

• PwC: In May 2015, PwC opened its Chengdu office.

 

• Shell: In March 2012, Shell and China National Petroleum Corporation signed a Production Sharing Contract for shale gas exploration, development, and production in the Fushun-Yongchuan block in Sichuan province.

 

• UBM: In August 2015, UBM’s second edition of HOTELEX Chengdu Exhibition, organised by UBM China and undertook by the Shanghai UBM Sinoexpo International Exhibition Co. Ltd. and the Sichuan Province Hotel Supplies Industry Association, was held in Chengdu.

Bombardier’s JV wins China deal to build 80 high speed train cars

 

CBI member Bombardier announced that Bombardier Transportation’s Chinese joint venture, Bombardier Sifang (Qingdao) Transportation Ltd. (BST), was awarded another contract with China Railway Corporation (CRC) to supply 80 CRH 1E-250 high speed new generation sleeper train cars for the country’s rapidly growing high speed network.

The contract is valued at approximately RMB 1 billion (€152 million, US$165 million). The 80 cars will be configured into five 16-car trainsets. In September 2015, BST also won a contract to build 15 eight-car CRH380D very high speed trains. These orders reflected the confidence China Railways has in BST’s leading edge technology and products.

It was also the second sleeper order which BST had won. The first one, awarded by the Chinese Ministry of Railways (MOR) for 20 16-car trains in 2007, was delivered in 2010. The five new 16-car trainsets will be an integral part of an evolving high speed rail capability in China. With an operating speed of 250 kilometres-per-hour, the EMU trains are specially designed for overnight service and fitted with sleeping berth interiors.

The trainsets will be manufactured at Bombardier Sifang (Qingdao) Transportation production facilities in Qingdao. Project management will take place in Qingdao and at Bombardier centres in Europe.

Please read more here.

Atkins wins Shangrao high speed rail project

 

CBI member Atkins announced that it had jointly won a contract with the Planning and Design Institute of Nanjing University, Beijing Branch, to provide urban design for the new high-speed rail development in Shangrao, Jiangxi Province.

Appointed by the Shangrao Urban and Rural Planning Bureau, Atkins will design an urban area to help boost economic growth and transform the district of Shangrao. The new high-speed rail district is located in the eastern downtown part of Shangrao, six kilometres from the city centre.

The development has adopted the eco low-carbon urban planning approach to provide green and open spaces to highlight the city’s natural beauty. A pedestrian system that encourages walking and cycling is proposed in the transport plan to promote the green travel lifestyle and sustainable development of the city. A digitalised smart network will improve the efficiency of public services and quality of life of city residents.

Shangrao is home to two UNESCO World Heritage sites and 21 national scenic areas. As the Shangrao high-speed railway hub will begin full operation in July 2015, the development will benefit from this link to the national railway network to help attract visitors to the city’s natural heritage sites.

 

CBI Member ABB signs MOU with Guizhou government

 

CBI member ABB, the Guiyang Municipal Government, and the Guiyang Free Trade Zone signed a Memorandum of Understanding (MOU) on Strategic Cooperation to explore in-depth cooperation in areas such as energy, industry, transportation, and infrastructure.

With the opportunities brought in recent years by China’s Go West strategy as well as its own resources and ecology, Guizhou Province has experienced strong economic development.

As the capital of Guizhou, Guiyang is an important hub of transportation and communication, an industrial base, and a commercial centre in southwest China. Taking the development of high-speed rail as an example, the Guiyang-Guangzhou, Changsha-Guiyang, Guiyang-Kunming, and Chengdu-Guiyang high-speed railway lines will all be gradually completed in the coming years, helping to create southwest China’s “one-hour economic circle” with Guiyang as the centre.

According to the MOU, ABB will use its advanced power and automation products and solutions to support Guiyang’s sustainable development. ABB has green and efficient technologies in three major areas—smart grid and city, smart manufacturing and production, and smart home and building—that can help customers from utility, industry, transportation, and infrastructure to reduce energy consumption, improve productivity and product quality, and lower environmental impact, thus achieving industrial upgrading.

Please read more here.

Xinjiang plans to invest RMB 16.8 billion in railway infrastructure in 2013

 

 

Xinjiang recently announced plans to invest RMB 16.8 billion (US$2.71 billion) in its railway infrastructure in 2013, which will significantly exceed the RMB 11.6 billion invested in 2011 and the RMB 12.9 billion in 2012.

12 railway projects started construction last year, of which four were completed. The other eight projects remain under construction.

Please read more here in an article by Transport Weekly. For more information about opportunities in Xinjiang please contact Ms Xia Diya of the Xinjiang EXPO department of MOFCOM: [email protected] or tel: 00 86 991 5190457

Balfour Beatty wins major rail construction contract in Hong Kong

 

CBI member Balfour Beatty recently announced that Gammon Construction, a leading Hong Kong construction company that is 50% owned by Balfour Beatty, won a HK$3.4 billion (£270 million) contract to work on a major section of the new Shatin to Central Link in a joint venture with Kaden Construction.

Awarded by the MTR Corporation Ltd., the contract includes the construction of two running tunnels covering one kilometre of track connecting the existing East Rail Line to the Hung Hom Station and the Hung Hom Station to the future Ho Man Tin Station.

The project is scheduled to be completed in 2018. Ian Tyler, Chief Executive of Balfour Beatty, said, "This is another significant contract award by the Hong Kong MTR Corporation. Not only is it a testament to the strength of our relationship with this valued customer, but also demonstrates the value that our partners put on the experience and expertise we have in delivering major transport projects around the world.

"One of our key strategic sectors is transportation, and this activity in Hong Kong builds on our strengthening global experience in rail."

Please click here to read the full press release by Balfour Beatty.

Beijing to Guangzhou high speed train link now open

 

(Image courtesy of www.news.cn)

On 26 December 2012, the new high-speed rail line between Beijing and Guangzhou in southern China opened. The 2,298 kilometre line is the longest high-speed rail line in the world and reduces the travel time between the two cities from more than 20 hours to only eight.

Running at an average speed of 300 kilometres per hour, the line stops in 35 cities and will eventually reach Hong Kong. 155 pairs of trains will run on the line every day, with second-class seats costing RMB 865 (US$138).

The line will add an estimated RMB 30 billion to China's GDP every year.

Zhou Li, director of science and technology at China's Ministry of Railways, said, "The opening of the railway will effectively reduce the social time cost and make travelling more convenient. It can play a great role in boosting coordinated regional economic and social development, promoting the integration
of neighbouring cities and accelerating urbanisation and industrialisation along the way."

Please click here and here to access coverage in the Chinese media.

Chinese investment into UK infrastructure " a win win" solution for all

 

 

China Investment Corporation (CIC), the country's main sovereign wealth fund, is keen to invest in the infrastructure of developed countries, particularly the UK.

Lou Jiwei, chairman and chief executive officer of CIC, recently wrote an article in the Financial Times in which he emphasised the interest of CIC in participating in the upgrading of the UK's infrastructure.

According to Mr. Lou, CIC, "is keen to team up with fund managers or participate in public-private-partnerships (PPP) in the UK infrastructure sector as an equity investor." 

Mr. Lou went on to note that, "CIC believes that such an investment, guided by commercial principles, offers the chance of a 'win-win' solution for all."

The UK government is increasingly looking to upgrade the country's infrastructure in a bid to boost economic growth, and Chinese investment could play an important role in helping achieve such aims.  In October, UK Prime Minister David Cameron pledged an "all-out" mission to help launch infrastructure projects.

Please read more here and here.  

Chinese Premier Wen visit to the UK - the real deal

 

 

China and the UK signed trade deals worth £1.4 billion ($2.3 billion) during Chinese Premier Wen Jiabao’s three-day visit to the UK this week. 

Premier Wen's visit demonstrates the growing commitment of both China and the UK to continue deepening bilateral ties through engagement at the highest levels.

Chinese Vice Premier Li Keqiang visited the UK earlier this year in January while UK Prime Minister David Cameron led the largest ever British delegation to China last November.

Each of the three high-level visits in the past eight months have yielded impressive packages of new business deals.

CBI members were well-represented in the commercial agreements signed during Premier Wen’s visit this week. Highlights include:

CBI member BG Group signed an agreement with Bank of China for $1.5 billion of new funding options to support the UK company's global growth plans.

CBI member Diageo received approval from Chinese regulatory authorities in Beijing to acquire a majority stake in well-known Chinese liquor maker Shuijingfang.

CBI member Benoy announced four new contracts for infrastructure projects worth over £10 million for the British company

CBI member Arup signed an MOU on railway cooperation with China Railway Engineering Corporation.

CBI member Nottingham University signed an agreement with China Aviation Industry Corporation to establish a new R&D centre at the University of Nottingham.

CBI member University College London signed an MOU with leading Chinese ethanol producer Tianguan Group on the development of a biogas research facility near the city of Nanyang in central China's Henan Province.

Premier Wen's visit also yielded a number of important government-to-government agreements, including:

UK Trade & Investment and China's Ministry of Commerce signed an MOU on cooperation on investment promotion.

The agreement reflects the UK government's desire to support Chinese investment into priority asset classes, such as infrastructure, as part of the new UKTI strategy to encourage more innovative and high-growth foreign direct investment into the UK.

UK Trade & Investment and China's Ministry of Commerce signed an agreement on trade in services, which will help support increased exports of UK services to China. The UK enjoys particular expertise in the services sector, and the country's services exports to China have been growing at an average of 17-18% annually over the last decade.

Please read more about the outcomes of Premier Wen's visit to the UK here and here.

China Direct would like to thank Ben Cooper, CBI Policy Analyst, for this contribution.