German maglev technology abandoned?
By Jiang Jingjing (Business Weekly)
Updated: 2004-12-15 16:02

German maglev technology owner International Transrapid has experienced some ups and downs in the past fortnight.

The firm received a heavy blow late last week with a Shanghai official quoted by Reuters as saying China may abandon the German technology, in a bid to slash a third of the cost in extending the maglev line from Shanghai Pudong International Airport to Hangzhou, 170 kilometres away in Zhejiang Province.

Claudia Hohmann, an official with Transrapid's public relations department, a joint venture among Siemens AG, ThyssenKrupp and the German Government, declined to comment or give any speculation on the project.

"It is up to the competent government authorities to decide which technology will be used," she said.

Hohmann said that their first project in Shanghai's Pudong District was a Sino-German success story. And she hopes there might be a good chance for more projects in China.

Only two weeks ago, Xu Kuangdi, dean of the Chinese Academy of Engineering and ex-mayor of Shanghai, confirmed in Beijing that the German-developed maglev technology will be adopted for the extension.

Compared with Japanese technology, which uses superconductor materials, the German technology is cheaper and is working well with the maglev line in Shanghai, the world's only maglev line in commercial use.

"Bidding for the project has not begun, thus no decision on a new contractor have been made," said Li Qiang, director of public relations at the Ministry of Railways.

"Maglev trains are an effective way to tackle the high speed transportation between populous cities, consuming clean energy and carrying a large number of passengers," said Sa Shuli, professor at the Beijing Jiaotong University and consultant to the Ministry of Railways.

"Introducing such trains will boost the progress of research and development (R&D) of the technology in China, where the study of maglev technology is still in its infancy," he said.

Unlike the support for the traditional railway technology industry in China, which employs at least 3 million people in 36 plants nationwide, there is not one single factory or sufficient R&D personnel in the country capable of putting state-of-the-art maglev technology to industrial use, Sa said.

He admitted that costs are a major issue. It costs about 300-400 million yuan (US$36.23-48.31 million) to complete one kilometre of the maglev rail.

"The budget of the whole project will exceed 60 billion yuan (US$7.25 billion)," Sa said.

Maglev trains float on a magnetic cushion at speeds of up to 430 kilometres per hour.

Traditional double wheel-rail lines can only reach speeds of 300 kilometres per hour.

Song Xiaojun, general manager of Shanghai Maglev Transportation Development Co Ltd, said the government was considering Chinese technology to keep project costs down to about 34 billion yuan (US$4.11 billion), according to a Reuters report.

A feasibility study of the project had been completed, Song said, but declined to predict when the government would approve it.

Insiders say the project is hoped to begin next year, otherwise the line cannot be put into use for the 2010 Shanghai Expo.

Two million people are expected to visit the expo every day.

A report on China News Net said officials in Zhejiang Province plan to present their proposal for the maglev line to Beijing by the end of this year. Construction will begin in 2005 if approved.

It said the line would begin operation in 2008, with tickets priced between 130-150 yuan (US$15.70-18.11).

Sa said economic factors must be considered for the project: "Can the huge investment make profit?"

The existing maglev line in Shanghai has actually witnessed poor public demand since it went into service.

The line started operating at the beginning of last year along a 38-kilometre route between the centre of Shanghai and the Pudong International Airport, located in the suburbs.

Like the Shanghai-Hangzhou project, the Pudong airport line initiated heated debate because of its high cost, amounting to 9.94 billion yuan (US$1.2 billion).

It carries an average of 8,000 passengers a day, bringing revenues of 130 million yuan (US$15.7 million) annually -- less than half the yearly bank loan interest, at over 300 million yuan (US$36.23 million).

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