Identifier
Created
Classification
Origin
08CHENGDU158
2008-07-18 02:54:00
CONFIDENTIAL
Consulate Chengdu
Cable title:  

CHENGDU TRANSPORTATION EXPERT CRITICAL OF NEW INFRASTRUCTURE

Tags:  ECON ELTN PGOV CH 
pdf how-to read a cable
VZCZCXRO0352
RR RUEHGH RUEHVC
DE RUEHCN #0158/01 2000254
ZNY CCCCC ZZH
R 180254Z JUL 08
FM AMCONSUL CHENGDU
TO RUEHC/SECSTATE WASHDC 2886
INFO RUEHOO/CHINA POSTS COLLECTIVE
RHEHAAA/NSC WASHINGTON DC
RUEHCN/AMCONSUL CHENGDU 3513
C O N F I D E N T I A L SECTION 01 OF 02 CHENGDU 000158 

SIPDIS

DEPT FOR EAP/CM

E.O. 12958: DECL: 7/18/2033
TAGS: ECON ELTN PGOV CH
SUBJECT: CHENGDU TRANSPORTATION EXPERT CRITICAL OF NEW INFRASTRUCTURE
PLANS

REF: 06 CHENGDU 1016

CHENGDU 00000158 001.2 OF 002


CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate
General, Chengdu.
REASON: 1.4 (b),(d)



C O N F I D E N T I A L SECTION 01 OF 02 CHENGDU 000158

SIPDIS

DEPT FOR EAP/CM

E.O. 12958: DECL: 7/18/2033
TAGS: ECON ELTN PGOV CH
SUBJECT: CHENGDU TRANSPORTATION EXPERT CRITICAL OF NEW INFRASTRUCTURE
PLANS

REF: 06 CHENGDU 1016

CHENGDU 00000158 001.2 OF 002


CLASSIFIED BY: James A. Boughner, Consul General, U.S. Consulate
General, Chengdu.
REASON: 1.4 (b),(d)




1. (C) Summary: According to a former long-time transportation
advisor to Chengdu party secretaries, it is highly unlikely the
city will be able to recoup the costs of either a new light rail
line to Dujiangyan, still scheduled to begin construction in
late 2008 despite the recent earthquake, or a new municipal
subway system already underway. Our contact referred to the USD
200 million Dujiangyan rail project as a "white elephant,"
commented that some post-earthquake resettlement plans involving
rural households might be ill conceived, and criticized current
government approval processes and mind-sets in which leaders
solicit but consistently ignore expert advice. End Summary.


2. (C) During a recent meeting with Congenoff, Xinnan Jiaotong
University Professor Gao Shilian (strictly protect),a
transportation advisor to several Chengdu party secretaries over
a period of twelve years, criticized the planned 58-kilometer
high-speed light rail line from Chengdu to Dujiangyan scheduled
to begin construction in November 2008. Gao is the brother of
Henan Province HIV/AIDS campaigner and government critic Dr. Gao
Yaojie.

"White Elephant" High Speed Line
--------------


3. (C) Not mincing any words, Gao noted the Chengdu - Dujiangyan
rail line makes "zero" economic sense. The line is too short,
the route is poorly planned with an intermediate stop, and
potential passengers are too few given that there is already a
new highway linking Dujiangyan to Chengdu. (Note: the USD 200
million project is expected to take two years to complete;
trains on the line will travel at speeds of 120 kilometers per
hour. end note). Gao predicts the rail line will not be able to
repay the interest on necessary loans. Typically these projects
are done with one-third appropriation and two-thirds loans.
Costs will rise even further after ten years when important
pieces of equipment will need to be replaced.


4. (C) According to Gao, the light rail project was originally
proposed ten years ago to the central government. The proposal,
however, coincidentally reached then-Premier Zhu Rongji's office
about the same time as another initiative to help impoverished
Sichuan peasants. Premier Zhu's response was to reject the rail
line and take money proposed for the rail line to increase
funding for assistance to Sichuan peasants.

New Subway System
--------------


5. (C) As Chengdu's former chief transportation advisor, Gao
still gets weekly internal updates on municipal transportation
developments. Digging has been completed on Chengdu's first
subway line, running north-south along Renmin Lu (the city's
main boulevard). Equipment is now being installed in the line.
Digging has also begun on the second line, which will run
east-west, crossing the first line at the Tianfu Square near the
Mao statue overlooking the downtown city center. Gao remarked
that, as the municipal government long ago transferred land
along the route of the subway lines to developers, it could be
difficult for the project itself to generate sufficient revenue
for the city to recoup the overall cost.

"Scientific Development?" The Leader Still Decides Important
Matters
-------------- --------------
--------------


6. (C) Gao commented that, despite talk in government circles
about "scientific development" (a Hu Jintao slogan),in reality
decisions are made by leaders alone, with little attention paid
to advice from advisors. Gao complained that several former
students he trained over the decades, including at the doctorate
level, have reached high positions of authority in the local
Party and government. When they meet, however, their
conversations are always limited to pleasantries and not to
substantive matters. The officials know they cannot make
decisions based solely on expert advice and he knows that they
can't. Instead, they talk about other subjects.

Prefab Housing in Dujiangyan
--------------


7. (C) Citing as another example of problematic government

CHENGDU 00000158 002.2 OF 002


decision-making processes, Gao recounted a discussion he
recently had with a farmer from Dujiangyan. Following the
earthquake, the farmer was given as temporary housing a
prefabricated shelter set up on a flat area in the city. The
shelter, however, was over an hour away from his fields. After
staying in the prefab briefly, he closed it and went back to his
damaged house. The farmer stressed to Gao that his house in the
countryside and the houses of many farmers could be repaired if
funding would be made available. Temporary houses in the city
are of little use to farmers as they are, "too small for raising
chickens and too big for raising pigs." According to Gao, the
placement of some prefabricated houses in Dujiangyan may have
been ill considered.

Comments
--------------


8. (C) Gao's criticisms track with what we hear from other local
interlocutors about the persistence of "Party think" and
continued follow-the-leader mentality in government structures.
Some of Gao's concerns relate directly to public finance. How
is the construction of major public projects financed, and what
will be the consequences down the road if they do not prove
economically viable? A scholar at the Sichuan Academy of
Sciences commented to us several months ago that Chengdu gets
30% of its revenue from land deals with developers. Given
ambitious development plans outlined in the January 2008 Chengdu
City Work report, which include not only the two initial lines
of the subway system and a rail network expansion of which the
Chengdu-Dujiangyan line is just one part, but also a second
airport for Chengdu, the problem of paying for the rapid growth
of infrastructure may become more pressing. Not discussed by
Gao is the possible role played by corruption in determining
which development projects and land transfer deals are approved
(see reftel).
BOUGHNER