Transportation Infrastructure in the Pearl River Delta

UNCLAS SECTION 01 OF 02 GUANGZHOU 000564 SIPDIS SIPDIS E.O. 12958: N/A TAGS: ECON EINV ELTN KTDB CH SUBJECT: Transportation Infrastructure in the Pearl River Delta (Part 2 of 2): Major Projects REFERENCE: 06 GUANGZHOU 17429 ¶1. (U) SUMMARY: Guangdong will initiate 62 major transportation infrastructure projects by 2010, requiring an estimated investment of RMB 550 billion (USD 71.5 billion). Projects planned for Guangdong's Pearl River Delta (PRD) include 17 expressways, a fourth and fifth rail line linking Guangzhou to Hong Kong, the province's first underground light-rail linking two cities, and an expansion of Guangzhou's Baiyun International Airport. This cable discusses specific projects by sector; septel describes overall planning and the role of foreign companies. END SUMMARY Projects and Spending -------------- ¶2. (U) In its 11th Five-Year Plan (2006-10),Guangdong province as allocated RMB 550 billion (USD 71.5 billion) for 62 major transportation infrastructure projects, most to be started by 2010 and most in the Pearl River Delta. The plan forecasts 2,000 km of new expressway, 1,100 of railway, 270 km of light rail, and 262 km of metro rail. The Guangdong government announced that it will spend RMB 48.5 billion (USD 6.3 billion) to improve transportation infrastructure in 2007. This is up from RMB 46.2 billion (USD 6 billion) in 2006, which was 13 percent more than 2005. Roadways -------------- ¶3. (U) Guangdong has the second longest road network (3100 km) among China's provinces (the longest is in Henan Province at 3439 km). The PRD has plans for 17 expressway projects under the 11th FYP, some of which are extensions of existing roadways. These roads will link the PRD with major cities in China's interior, such as Wuhan, Chongqing, and Xi'an. A second expressway between Guangzhou and Shenzhen will be completed by 2009 with a total investment of RMB 16 billion (USD 2.1 billion). A Hong Kong firm is providing some of the investment for the highway as well as a new ring road around Guangzhou. (The first Guangzhou-Shenzhen highway was completed 10 years ago and was also Hong Kong-invested.) An expressway linking Guangzhou to Zhuhai is also under construction. ¶4. (U) The expansion of Guangzhou city's road network during the 11th FYP will require an investment of RMB 50 billion (USD 6.5 billion). The city is currently building its second ring road and plans to complete its fourth ring road by 2010, according to Professor Fu Xinsha of South China Normal University. However, Professor Fu said the speed of road construction does not match the city's needs, and identifying and fixing bottlenecks is a priority. Guangzhou is also building highways linking it to cities in central and northern Guangdong, such as Conghua and Heyuan. ¶5. (U) A bridge linking Hong Kong with Macau and Zhuhai is still in the planning stages and waiting environmental assessments and approval from the three governments. It would extend 40 km and require an investment of RMB 55 billion (USD 7.2 billion). Observers estimate it will not be completed until at least 2012. The Guangdong government hopes this will spur development in the less-developed western half of the PRD. Railways -------------- ¶6. (U) Guangdong's top railway projects include extending the Beijing-Guangzhou and Shenzhen-Guangzhou lines. New rail will be laid to improve connections between PRD cities and Xiamen, Shaoguan, Zhanjiang, Nanning, Wuhan, and Luoyang. ¶7. (U) Guangzhou is also focused on expanding its rail network, according to Chen Shanliu, Director-General of the Guangzhou Development and Reform Commission. This includes two Guangzhou-Zhuhai rail systems: one light rail and the other cargo. Planners have also approved a fourth rail line from Guangzhou to Hong Kong, which will shorten the travel time from two hours to one hour. Another cargo rail line - the fifth railway between the two cities -- is also in the planning stages. ¶8. (U) Panyu, located 14 km south of central Guangzhou and a central point in the PRD, has been designated as a central transportation hub for rail and expressway networks, according to Chen Sanliu, Director-General of the Guangzhou DRC. The hub station is scheduled for completion in 2008 and will require RMB 4.1 billion (USD 0.5 billion) in investment. The Panyu hub station will be the service point for the planned Wuhan-Guangzhou railway. ¶9. (U) Panyu will also be a hub for the 560 km light rail network that will link Guangzhou, Foshan, Zhuhai, and Shenzhen. Construction will begin this year on Guangdong's first underground rail project to link two major cities -Guangzhou and Foshan. The GUANGZHOU 00000564 002 OF 002 project costs RMB 14.7 billion (USD 1.9 billion) and extends 32 km, according to news reports. It will be completed by 2012 and at peak hours will be able to transport 40,000 passengers between the two cities hourly. Already, more than 300,000 people commute between the two cities daily. Metro Rail -------------- ¶10. (U) Guangzhou and Shenzhen are rapidly expanding their metro rail systems in order to alleviate pressure on their roadways; Guangzhou is at times gridlocked with almost 2 million cars (and is adding 150,000 per year while Guangdong Province adds 600,000 per year). Guangzhou currently has four metro lines in operation; lines three and four opened in December 2006. Another four lines will be completed by 2010, expanding the system from the current 111 km to 240 km. Shenzhen plans to expand from its current two metro lines to six by 2010 (reftel). Additional lines should improve linkages with Hong Kong. Airports -------------- ¶11. (U) CAAC has predicted that the air traffic in the PRD region will grow by 15-20 per cent annually from 2005 to 2010. The PRD currently has major airports in Guangzhou, Shenzhen, and Zhuhai. Guangzhou's Baiyun International Airport, which opened in 2004, handled 26 million passengers and 650,000 tons of cargo in 2006 and is expected to see 40 million passengers and two million tons of cargo by 2010. The airport recently began phase two of its construction, which will require investment of RMB 17.5 billion (USD 2.16 billion) and which is scheduled to be completed in 2009. The expansion includes new cargo terminals, aprons, and a third runway that can accommodate the A-380. The Guangdong DRC Deputy Director has stated that the government will retain a majority stake in all airport-related projects. The airport will eventually be linked to other PRD cities by highway, railway, metro, and light rail. FedEx will use the airport as its Asia-Pacific hub beginning in 2008. ¶12. (U) Shenzhen International Airport is the fourth largest airport in China after Beijing, Shanghai, and Guangzhou airports in terms of passenger and cargo handling capacity. To cope with fast-growing cargo demand, the airport plans to complete a new terminal and runway by 2008. The Airport Authority of Hong Kong took over management of the debt-ridden Zhuhai Airport in October 2006 and is expected to focus on cargo transport. The airport is beginning renovations, including a ferry service between airports in Hong Kong and Macao. Ports -------------- ¶13. (U) Guangdong has the heaviest port traffic among China's provinces, according to Guangdong DRC's Zhang. The province spent RMB 11.8 billion (USD 1.5 billion) on its ports in 2006 and its cargo throughput was up 14 percent. Shenzhen is China's second busiest port city and Guangzhou is number three after Shanghai. Guangzhou ports' cargo volume is growing 20 percent annually -- largely because of the completion of deep-water Nansha Port in September 2004. Nansha has 10 berths and will reportedly have an annual capacity of more than 10 million TEUs by 2010. Guangzhou will spend RMB 26 billion (USD 3.4 billion) to expand its ports in the 2006-10 period, much of it going to new berths at Nansha. Guangzhou is also building a new highway connecting Guangzhou to Nansha. ¶14. (U) Shenzhen's largest port, Yantian, plans to add six berths to its existing nine. Hutchison Port Holdings, a consortium led by Hong Kong's Hutchison Whampoa, holds a 73 percent interest in the port, with the Shenzhen government holding the remainder. Yantian's general manager Kenneth Tse told a visiting delegation in March 2006 that rail and roadway bottlenecks are growing more severe in Shenzhen because of the rapid growth of the city's port activity. GOLDBERG