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Pan-Asian railway set in train
By David Fullbrook
BANGKOK - A seamless railway spanning Asia is moving closer, with trial runs
inspiring officials and shippers, promising a boost for economic growth and
jobs. Whether those benefits arrive on time depends on 27 governments - due to
sign an agreement in 2006 - giving the project high priority.
Faster shipping can reduce costs, making goods more competitive, translating
into more sales, higher profits and more jobs. Ripples go even further in a
world of just-in-time manufacturing, allowing suppliers, producers and
retailers to stock less, releasing money from inventories. "Logistics costs,
including transport, storage, warehousing, packaging and related value-adding
services, account for 10-40% of the delivered cost of goods," says Pierre
Chartier, an economic affairs officer overseeing railway projects at the United
Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
Shipping freight across Asia and, even on to Europe, is today far from smooth
sailing. Many important links between national and regional networks exist only
on planners' maps, where they have been for decades, or even longer. A railway
from Yunnan in southern China to Myanmar or Thailand was being called for in
the 1880s. "The goal of the Trans-Asian Railway is to assist member countries
take full advantage of their past investment in railways and promote a greater
utilization of rail to meet the ever-increasing demand for efficient transport
infrastructure and services due to the growing international trade," says
Chartier.
ESCAP officers are also trying to include services for people. Public
transport, like trains, is a lifeline for poor people, making working in
far-off places affordable and palatable because traveling home to visit their
families is easier. In some areas, links have come and gone, such as those
between Cambodia and Thailand, or a link from China's Xinjiang to Kazakhstan
that was completed in the mid-90s, only to fall into disuse a few years later
before being restored last year.
Links bring their own problems. Railway gauges abruptly change at borders,
requiring switching cargo from one set of rail cars to another. Though
containers have made this faster and more secure, there is significant room for
improvement, probably adapting systems and technology that allow ports such as
Hong Kong, Shenzhen and Singapore to load and unload giant cargo vessels in
just a few hours.
Customs, quarantine and security inspections, and paperwork further slow a
goods train's progress. If officials can agree on common standards and
technology, they will cut shipping times and costs significantly. It's not easy
though. "It's possible, but getting everybody coordinated and agreed on all the
standards is tough," says Ravindran Devagunam, who leads transport consulting
for Deloitte in Singapore.
ESCAP rail experts are now revising a draft agreement accepted by 27 Asian
countries in November 2004 at the Intergovernmental Agreement on the
Trans-Asian Railway Network meeting. They hope rail officials from these
countries will agree on a final agreement in November this year, with transport
ministers signing it a year later. Governments signed a similar agreement for
the Asian Highway Network last year.
With no formal power to make governments listen, the only tool for the ESCAP
experts is the fine art of argument, debate and persuasion. They organized
demonstration trains to fire-up interest. "A positive outcome has been the
interest shown by a number of freight forwarders to make increased utilization
of rail services in the future," says Chartier. One train hauled containers
from Lianyungang in China to Almaty in Kazakhstan, covering 5,000 kilometer in
just over seven days. Another train from Brest in Belarus to Ulan Bator in
Mongolia covered 7,200 km in less than nine days. These trains show the
feasibility of running regular scheduled services similar to those shipping
lines provide between ports around the world. Most rail shipments in Asia and
to Europe now are long-term contracts shipping bulk commodities like oil.
Increasing world trade means opportunities are growing. Meanwhile environmental
concerns are rising too. Road transport pollutes more, is less safe, and only
really efficient over short distances. Increasing congestion in sea lanes is
attracting pirates, especially in the Malacca Strait, raising fears over safety
and disruption. "If synergies are developed, member countries will be in a
position to take full advantage of the potential benefits offered by railway
transport. At the same time, railway companies will be able to capitalize on
long-distance movements for which they are economically better suited than
other surface modes. This is especially important for landlocked countries,"
says Chartier.
Of the world's 30 landlocked states, 12 are in Asia. Cut off from the sea,
landlocked countries are usually noticeably poorer and less developed than
coastal states. Politically volatile Central Asian states are a case in point.
Better access to foreign markets could brighten their economic prospects and
make supplies of commodities and minerals, especially oil, more reliable.
Most of the world's oil ships by sea through vulnerable choke points like the
Strait of Hormuz, the Suez Canal and the Singapore Strait. Their nearest sea
ports are at least a few thousand kilometers away along tenuous routes and
major markets like Europe and the Far East even further. Routes between the far
ends of Eurasia are half the distance of sea routes between the two coasts.
"Given the long distances by land within Asia and between Asia and Europe,
railways seem to have a bright future ahead," says Chartier.
Goods traveling by train from the Korean Peninsula to Europe will cover about
11,000 kilometers, half the length of a journey by sea. Freight trains from
Russia's Far East coast opposite Japan can reach Finland in 11 days, Germany in
less than 15. However, do not expect shares in shipping lines to collapse. They
are efficient and well established. They will be tough competitors for
coast-to-coast traffic. "Between Asia and Europe, I think the sea channels
would be a lot more cost-efficient, they are very well established. The
benefits will be intra-Asia, especially for landlocked countries," says
Devagunam.
This railway is not going to appear overnight. Four corridors grew out of the
Asian Land Transport Infrastructure Development (ALTID) project that began in
1992. In 1995, ESCAP officers and national officials identified a northern
corridor combining elements of railways in China, the Koreas, Mongolia,
Kazakhstan and Russia. They also agreed a corridor covering the Association of
Southeast Asian Nations (ASEAN). Four years later, they finished drawing a
southern corridor across their maps stretching from Yunnan and Thailand by way
of Myanmar, Bangladesh, India, Pakistan and Iran to Turkey. In 2001, they drew
up a corridor linking northern Europe to the Persian Gulf through Russia,
Central Asia and the Caucasus.
A quick glance at the map reveals more than a few gaps. Railways of the
Association of Southeast Asian Nations (ASEAN), where they exist, are generally
in a pretty poor state, with double-track - which makes journeys much faster -
rare. That is starting to change. Malaysia is double-tracking its railways.
Thailand just may start work this year on nationwide double-tracking, a $10
billion project, after thinking it over for a few decades or so. Worse,
perhaps, is the southern route. Linking China and Thailand to Bangladesh will
require a new railway across Myanmar, plus a long link from central Iran to
Pakistan.
Missing rails are not the only challenge. Hopes wax and wane with the moon for
running trains from South Korea to Russia, or China, via North Korea.
Reliability is not Myanmar's forte, though Chinese pressure and a little money
should smooth things there. India's concern about opening up the Myanmar border
may play a role in slowing the project. Railways in general need upgrading, and
not just hardware like better rails, points or signaling. Many railways simply
lack enough wagons.
Management needs to improve, putting punctuality and service first. Shippers
also need to sharpen up to reassure wary customers. International public and
private collaboration is also not what it should be. "For the railways of Asia
to compete effectively and capture a larger part of the market, there is an
urgent need for greater cooperation," says Chartier.
There are some signs this is improving. "Azerbaijan, the Islamic Republic of
Iran and the Russian Federation have signed a cooperative agreement to develop
the North-South corridor linking northern Europe to the port of Bandar Abbas on
the Persian Gulf, and Malaysia and Thailand have now been cooperating for over
five years to develop and operate a container land-bridge between Port Klang
and Bangkok," says Chartier.
To get things moving, governments need to step back, focus on creating the
rules that offer attractive opportunities to private money and skilled
logistics firms. From small acorns do big trees grow, but only if well watered
and tended. That is the real challenge - whether governments are prepared to
make good on fine platitudes, smiles and handshakes. That will take money,
which some do not have or would rather spend on other things. "If it happens,
it's great, but to be honest I don't see it happening in the next five years,"
says Devagunam.
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