Chinese railway project gets $500-million loan from ADB

Chinese railway project gets $500-million loan from ADB    The government of the People’s Republic of China will receive $500 million in loans from the Asian Development Bank to finance a new east-west railway, as part of a $2.4-billion project.
   The loan, the Asian Development Bank’s largest to date, will “help finance the missing link in one of the main east-west railway routes, thus relieving a serious bottleneck in the rail network,” the bank said.
   In addition to the Asian Development Bank loan, the Chinese government’s Ministry of Railways will finance about $1.1 billion of the project and the China Development Bank will provide a loan for $725 million.
   The project will construct 377 kilometers of electrified single-track railway between Yichang in Hubei province and Wanzhou in Chongqing municipality, together with power facilities, freight yards, signaling and communications, maintenance and container handling equipment, and train control systems.
   The Asian Development Bank said that the railway will shorten various routes across the north-south and east-west axes of China, providing the fastest land link between Shanghai on the east coast and Chengdu and Chongqing, key growth areas in the west.
   “In line with the government’s western development strategy, the project will provide less costly, more reliable and safe transport between major economic centers, promoting economic development in the isolated project areas along the way,” said Hiromi Sakurai, an Asian Development Bank financial specialist.
   The poor interior regions in China have not benefitted as much from economic growth and reforms as the east coast, the bank noted.
   The project will assist the Ministry of Railways in developing market-based financial decision-making tools to analyze profitability and investment returns, and strengthen its ability to appraise projects. The project will also finance a study to help Ministry of Railways assess ways of allowing greater private sector and foreign capital involvement.
   A business plan for the project railway including container cargo development will also be formulated through consulting services.