CHINESE Railways started construction of its latest dedicated passenger railway on June 12, with a ceremony on the borders of Hebei and Shanxi provinces.

Expected to cost 12·6bn yuan, the 189 km route linking the provincial capitals at Shijiazhuang and Taiyuan is predicted to carry 15 million passengers a year when it opens in 2008. Running through mountainous terrain, the 200 km/h line will have 94 bridges and 32 tunnels, including a 27·8 km bore which will be the country's longest rail tunnel to date.

Work is due to start next year on a 300 km express line linking Haikou and Sanya on the south side of Hainan Island, under an agreement between the Ministry of Railways and the provincial government announced on May 26. To work the growing passenger network, CR confirmed at the end of May that it was to buy a further 20 eight-car trainsets from the Bombardier Sifang Power joint venture, lifting the total order to 40 sets worth €560m. Deliveries are due to run from July 2006 to December 2007.

With the CR network scheduled to grow from 74000 to 100000 route-km by 2020, the ministry is looking at ways to attract foreign and private investment to help meet the anticipated 2000bn yuan cost. Potentially profitable projects, such as container terminals, could be put out to tender, according to Zhang Jianping, Vice-Director of the ministry's Planning Department. Some profitable passenger lines might also be restructured as independent companies and floated on the stock market.

On June 14, Shandong Province became the first to be authorised to permit foreign investment in railway projects and allow the transfer of railway property assets to private ownership, following a ruling by the State Assets Regulatory & Management Committee.

Meanwhile, Dalian-based Xinrong Investment Co and Russian steel firm Evrazholding signed an agreement last month to finance and built a 56 km cross-border railway linking Hulin in Heilongjiang and Lesozavodsk in the Russian Far East, at an estimated cost of 480m yuan.