The growing demand for freight and passenger transport, increased industrialization and urbanization, and road traffic congestion has driven most countries in the Asia Pacific to develop their railway infrastructure.
"Metro trains, mass transit systems, and suburban rail services in urban areas are likely to take the traffic off the roads, offering an ideal solution to the problem," says Frost & Sullivan Consultant Rohit Gunavanthe.
Countries in this region are adopting different strategies to deal with their internal transportation issues. While China is focusing on high-speed rail, India is looking to revamp its existing lines and expand its metro rail network. Japan has plans to expand its bullet train (Shinkansen) services and the Malaysia's national railway company, Keretapi Tanah Melayu Berhad (KTMB), is expected to introduce a rapid intercity service between its two main stations - KL Sentral and Ipoh.
Meanwhile, the State Railways of Thailand intends to broaden Bangkok's mass rapid transit system to surrounding provinces and launch an elevated metro system for Bangkok. Not to be left behind, South Korea hopes to start a high-speed express train service linking its capital to two major cities. However, such ambitious expansion and modernization plans require significant investments and technology expertise.
"The expansion of railway networks includes laying of new tracks, their electrification, revamping of rolling stock, and setting up new stations," notes Mr. Gunavanthe. "These involve substantial expenditure on raw materials, machinery, technology, and skilled workforce - not all of which are available locally."
Therefore, market participants are relying on tie-ups or collaborations with global companies specializing in this field to acquire the required technical know-how, he added.
Mr. Gunavanthe said that as for funds, the infrastructure development is financed by the government or rail authorities with aid from private enterprises. The Asia Pacific rail market has gone from being largely state-owned to being mostly privatized.
China's rail market will benefit from both public and private funding as its Ministry of Railway, implementing its five-year plan ending in 2010, will invest US$190 billion to lay new tracks and acquire rail equipment. The country's rail market received a further boost when Bombardier, a Canada-based global leader in rail equipment, signed contracts worth nearly US$1.5 billion with China's Dalian Locomotives and Rolling Stock to produce 500 electric freight locomotives in 2007.
"Additionally, Alstom of France has signed two contracts worth more than US$465 million with the Chinese Railways Ministry to build electric freight locomotives and to electrify high-speed lines on the mainland," observes Gunavanthe. "Other leading global rail equipment companies such as Siemens of Germany, trading company Mitsui (MITSY), and Kawasaki Heavy Industries (KWHIY) of Japan also have a significant role to play in China's railway network expansion plans."
