SHANGHAI'S MEGA TRANSPORTATION HUB ON COURSE TO LAUNCH

UNCLAS SECTION 01 OF 02 SHANGHAI 000267 SENSITIVE SIPDIS TREASURY FOR OASIA/INA/HAARSAGER AND WINSHIP DEPT FOR EAP/CM, INR/B, EEP/TRA/AN USDOC PASS BUREAU OF ECONOMIC ANALYSIS USDOC FOR ITA DAS KASOFF, MELCHER, OCEA STATE PASS USTR FOR STRATFORD, WINTER, KATZ NSC FOR LOI, SHRIER USPTO FOR BOLAND, WU STATE FOR EAP/CM, EB AND E TRANSPORTATION FOR OST X-1, X-40 E.O. 12958: N/A TAGS: EAIR ELTN ECON PGOV ECIN CH SUBJECT: SHANGHAI'S MEGA TRANSPORTATION HUB ON COURSE TO LAUNCH REF: SHANGHAI 60 SHANGHAI 00000267 001.2 OF 002 ¶1. (U) In a May 26 briefing for diplomats arranged by the Shanghai Foreign Affair Office, Shanghai authorities said the Hongqiao Comprehensive Transportation Hub (Hongqiao Hub),one of China's largest infrastructure projects (reftel),is on schedule to begin partial operations before for the 2010 World Expo. The mega project, located in the western suburbs of Shanghai, will integrate the new terminal of the Shanghai Hongqiao International Airport, the magnetic levitation train (Maglev),a high speed railway connecting Shanghai to Beijing, inter-city shuttle trains, 5 subway lines, 4 highways, and an extensive bus network. The complex will also include a large shopping mall that covers 1 million square meters above ground and 500,000 square meters below ground, as well as a large commercial building. Only the airport terminal, one subway line (the number 2 line),inter-city shuttle and bus terminal are slated to be complete by the World Expo. Other components will be added later. End summary. Hongqiao Airport - Not Competing with Pudong Airport -------------- -------------- ¶2. (U) According to Hongqiao Investment Corporation General Manager Jing Zhuanglong, the Hongqiao Aiport will be a major component of the 26 square kilometers hub, and like the rest of the hub components, will be focused on domestic transportation. After completion, the Hongqiao Airport will have two runways and a 40 million passenger annual capacity. Jing believes the revamped Hongqiao Airport will not compete with Shanghai Pudong International Airport, which will remain the premier international airport in the city. (Shanghai Pudong International Airport was constructed in the 1990s and entered into operation in 1999 . The much older Hongqiao Airport currently only has international flights to Japan and Korea.) Why Place the Hub in Densely Populated Hongqiao District? -------------- -------------- ¶3. Jing noted the rationale for the city to locate the Hongqiao Hub in the densely populated district of Hongqiao. Since the 1970s, Shanghai set aside land for a runway expansion at Hongqiao Airport, which was planned to be the only airport in the city. The land that was set aside for the additional runway also had sufficient space for the Hongqiao Hub. After considerable thought, the city decided to integrate the Shanghai-Beijing High Speed Rail terminal planned for Qibao, another Shanghai district, with the Hongqiao Airport/Maglev project to create the mega transportation hub. A Project with Political Backing -------------- ¶4. (U) According to Jing, Shanghai leaders view the Hongqiao Hub as an important project for integrating the city with the rest of East China. He said the project is part of Shanghai's five key projects announced by Shanghai Party Secretary Yu Zhengsheng. Jing said the project has been planned for years, and the money had already been set aside for its construction. The financial crisis has had little effect on the project, and no stimulus funds from the Central Government or Shanghai Municipality are involved. Jing added the financial crisis did bring one side benefit for the project in the form of cheaper SHANGHAI 00000267 002.2 OF 002 financing. Comment: A Sign of Shanghai's Political Climate Change -------------- -------------- ¶5. (SBU) Shanghai leaders have been eager to showcase the Hongqiao Transportation Hub as a key to greater economic integration of Eastern China. The tour of the new complex for foreign diplomats is one in a long series of displays and events to highlight the facility. Along with the scale model prominently displayed at the Shanghai Urban Planning Museum, there are several other scale models on public display sprinkled throughout the city, and media reports regularly update the public on progress of the project. This is a world away from early 2007 when the massive project initially got underway. Nary a footnote was made in the local media at the time. The reason - the sacking of Party Secretary Chen Liangyu for corruption in the fall of 2006 made him and his legacy of costly showboat projects politically untouchable. The Shanghai Government ordered a halt to all of Chen's large-scale plans and a thorough review. The gradual return to prominent showcasing of such mega projects means Shanghai is again seeking center stage in China's push to develop into a modern, economically-developed country. It also means former Party Secretary Chen Liangyu's tainted legacy has now faded into a more distant memory. SCHUCHAT