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China's uncontrolled over investment in railways, tollways

November 4, 2011

Caixin Weekly: China Economics & Finance (Caixin Media)
- Clipping Loc. 728-808 | Added on Wednesday, November 02, 2011, 04:39 PM

Expressways of Excess Lu Dadao has long warned about the risks of highway,
railway and airport overbuilding, and now people are listening
By staff reporter Yue Zhen | 1583 words

Excessive. That's the word Chinese Academy of Sciences (CAS) academic and
National Planning Expert Committee member Lu Dadao uses to describe the
scope and pace of transportation-related construction projects in China.
In a recent interview with Caixin, 71-year-old Lu repeated his long-held
concerns about the nation's vast transportation building program,
referring specifically to a critical report written by a research team he
headed and submitted to the central government one year ago. At that time,
Lu said he "faced great pressure" in part because Liu Zhijun was still
serving as the nation's powerful minister of railways. Liu was sacked for
alleged corruption in February, and his push to build bullet trains was
discredited by a deadly collision in July. The report Lu cited stemmed
from a June 2010 initiative by the CAS Faculty Advisory Committee, which
issued a report called Recommendations for Avoiding Excessive
Transportation Construction in China. The report's authors argued that
sizeable investments in the nation's transportation sector since 1997 had
created excess capacity. The gap between supply and demand became even
more prominent after the 2008 global financial crisis prompted the Chinese
government to push for even more building projects through a 4 trillion
yuan economic stimulus package. Lu and the report's other authors were
finally heard after the July 23 collision of two, high-speed trains near
Wenzhou killed 40 people. The tragedy prompted the State Council to order
a cool-off for bullet train expansion. The nation's experience with
high-speed railways has become a touchstone for reflecting and adjusting
to what's been called a perilous "great leap" for transportation
development. Lu is China's leading economic geographer and the current
president of Geographical Society of China. Invited by the central
government, he participated in drafting a number of regional development
strategies, such as the plan for developing the Bohai area in Tianjin.
Excerpts from the interview follow. Caixin: What's the status of China's
transportation construction initiative? Lu: It's mainly about excessively
big, redundant construction and unfair competition, as well as a lack of
coordination between different modes of transport. First, look at
expressway construction. In 2008, the nationwide total mileage plan was
adjusted up to 100,000 kilometers. That year alone we built 6,433
kilometers and invested a total 600 billion yuan. Nationwide expressway
mileage is expected to grow to a staggering 180,000 kilometers, if we add
provincial and national building plans. Personal vehicle traffic levels
are too low on some expressways built over the past five years.
Considerable stretches of expressways completed in central and western
regions are usually empty, simply basking in the sun. Thus, expressway
construction has suffered from excessive expansion. It's gotten out of
control. Second, over-expansion for coastal port development planning and
construction has clearly led to excessive competition between ports.
China's port throughput capacity reached 4 billion tons in 2008, yet
coastal communities continue to compete in the race to build large-scale
berth and shipping container ports. Every port authority makes lofty
claims about becoming a coastal or international hub for commercial
shipping. Additionally, many regional airports are being built blindly,
with huge investments but no feasibility studies. This has led to major
losses. In 2008, national subsidies to small- and medium-sized airports
reached 9.3 billion yuan. But by 2020, we'll have added another 100 or so
airports, mainly regional airports. Every year recently, construction has
begun on about 20 regional airports, and more are waiting to be approved.
Moreover, there's been a surging wave of railway construction projects,
including intercity rail linking big cities, suburbs and small cities in
some provinces, regions and municipalities. Our research group found there
will not be enough traffic to support the big, city-centered railway
transportation systems after they are completed. Caixin: But in some
situations, supply still can't meet demand. For example, during the
Chinese New Year period, railway tickets are extremely hard to get. Lu:
This relates to the problem of current demand versus long-term demand.
Over the past few years, some medium- and long-term plans drafted by
national and regional authorities have touched on the long-term. But in
terms of implementation in recent years, many projects have been running
far in advance of demand. In fact, most of our medium- and long-term plans
are very backward because they do not take into account the regional
particularities of passenger traffic concentration. In provinces that are
exporting manpower, transportation planning and construction can't keep
up. The future national framework transportation plan should be built on
analyzing and forecasting traffic volume and direction. Too many highways
have complicated socio-economic systems in regions along their paths,
fragmented the land, and even destroyed socio-economic ties. In a sense,
expressways benefit the rich. There is no country like ours that builds
expressways between every county, that violates the development pace of
transportation systems and that skips stages of societal development.
Currently, China's expressway network accounts for 1.62 percent of total
road network mileage, which is higher than in either Europe or America. In
eastern regions, the expressway ratio is as high as 2.4 percent, and in
the west it has reached 1.16 percent. This sort of road network clearly
reflects one fact: Expressways, which play a backbone transportation role,
are mismatched against other kinds of roads. The tot <You have reached the
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