China eager to bring bullet train expertise to Ontario

theglobeandmail.com
Feb. 3, 2015
By Nathan Vanderklippe and Adrian Morrow

Ontario has barely begun sketching out plans for a high-speed rail corridor, but China is already jumping at the chance to bring its technological prowess to Canada - even suggesting it would swap its rail know-how for natural resources.

China is eager to expand trade with Canada and improve its image, particularly following the backlash to the billions its state energy companies have invested in Canadian oil and gas. Now it has set its sights on Ontario, which is studying the viability of bullet trains as one of a raft of potential new transit projects.

High-speed rail in Canada would take many years to come to fruition - and may well never happen, given decades of failed attempts. China, however, is so eager to participate that its ambassador to Canada is already lobbying to be involved in building a 370-kilometre Toronto to Windsor corridor - potentially one of the largest infrastructure projects in Ontario’s history.

Luo Zhaohui, the ambassador, expressed China’s interest in discussions in December with Ontario Premier Kathleen Wynne, who is said to have been impressed after riding the fast trains in China last fall. Mr. Luo offered Ms. Wynne Chinese assistance with designing, building and operating such a line, said an Ontario government official who has knowledge of the meeting but is not authorized to speak publicly about it.

China’s pitch has piqued interest. Transportation Minister Steven Del Duca said Ontario, which has never built high-speed rail before, is happy to discuss China’s proposal.

“I’m open to exploring and drawing on not just potentially Chinese experience, but any global experience in terms of best practices that are out there,” he said in an interview.

An environmental assessment process, which the province launched late last year, will take between four and six years to complete and there will be no construction until after that.

But Mr. Del Duca said that, even as the environmental assessment proceeds, he would like to start discussions on how to finance and build the line.

The goal, he said, is to be able to start construction shortly after the assessment is finished.

That suggests involvement by potential bidders, including Chinese state-owned rail companies, is a nearer-term possibility - although Mr. Del Duca emphasized that it remains early days, and decisions have yet to be made on how design and construction will be managed.

China began a high-speed rail building spree in the 1990s, and now has a network of more than 11,000 kilometres of fast track - as much as the combined length of high-speed track in the rest of the world - and work is under way to nearly double that. Its striking platypus-nosed locomotives thunder across fields still worked by hand, making the trains among the most visible symbols of China’s immense economic and technological advancement in recent decades.

China is using its expertise in railways to project hard and soft power. Chinese rail companies have been active, and often successful, bidders for rail projects in Kenya, Nigeria, Argentina, Mexico and Saudi Arabia, working hand in glove with the Chinese government to secure deals.

On average, China builds high-speed track at a cost of $30-million (U.S.) a kilometre, which is “$20-million cheaper” than many other countries, said Wang Mengshu, a railway construction engineer at the Chinese Academy of Engineering, who advises the government on rail projects.

At such a price, the proposed Ontario line would cost $11.1-billion (Canadian), although that is a rough price tag for building track alone and does not include land acquisition or buying high-tech locomotives and cars.

“We offer an all-in-one service including geological surveying, planning, design, construction and operation,” he said in an interview.

Mr. Wang specifically touted China’s advantage over competitors like Bombardier, which he said “doesn’t have the whole set of services.”

Marc Laforge, a spokesman for Bombardier’s transportation division in Montreal, said it is impossible to put an accurate price tag on a high-speed rail project until all the costs are known.

“Until you get the project under your nose, we don’t put any credibility in that,” he said, referring to Mr. Wang’s $30-million-per-kilometre cost estimate. On China boasting its advantages over Bombardier, Mr. Laforge said: “We have been part of more than 90 per cent of all high-speed rail projects around the world and this is enough of a track record that it speaks for itself.”

He said Bombardier is watching what is happening in Ontario, but has not had any discussions with Ontario officials about getting involved.

A spokesman for Aecon Group Inc. said the construction and infrastructure company did not have enough information on the Ontario proposal to make a comment.

China’s exports of rail technology and construction have been largely aimed at developing and authoritarian countries, and its development model would fit in a place like Canada.

Mr. Wang, for example, said Beijing would be eager to secure Canadian natural resources in exchange for building track, pointing to gas-for-rails trade that China has with Uzbekistan as an example. He also said the use of Chinese construction workers would be helpful, but that would be “up for further discussion.” Chinese workers were instrumental in building the first pan-Canadian railway, but public opinion would be unlikely to accept the import of Chinese labourers to Canada today.

Mr. Del Duca chuckled when asked about the prospect of a resource-swap deal.

“I know I talked about open-mindedness and flexible thinking a second ago, but I don’t think we’re in a position to take a look at that kind of thing,” he said.

“I’m not even sure we have the jurisdiction to do so.”

Canada is the only G8 nation without fast trains, although it is a type of transportation that has been discussed for decades.

The most recently completed study suggested it would take 14 years to get a Windsor to Quebec City line in operation - a more extensive idea than the one now under consideration by Ontario.

Construction costs could never be recouped, meaning it would require a government rail grant of, at the time of the study, roughly $20-billion.

Even with a 300 km/h train, the study suggested 85 per cent of people would still drive that route in 2031, compared with 89.3 per cent in 2006.