The Asian Development Bank (ADB) will conduct a study to help China draw up a policy reform plan for the country's railway passenger and freight transport, through a technical assistance grant of 400,000 US dollars.

Manmohan Parkash, an ADB transport specialist, said China's railways have been unable to meet the increasing demand for passenger and freight transportation in recent years, despite significant progress and notable achievements, the bank said in a statement.

The country's rapid growth over the last two decades has been accompanied by high annual growth in passenger and freight transport - reaching 9 percent and 7.4 percent, respectively, between 1978 and 2004.

But despite this growth in traffic, China's railway system has lost ground to other modes of transport.

The Chinese Government aims to remove constraints facing the railways system and to expand the network. Under its five year plan for 2001-2005, it envisages building some 6,000 km of new lines to previously unserved areas, providing 3,000 km of double lines, electrifying 5,000 km of key lines to boost capacity, and increasing operating speeds on 5,000 km of lines.

Given the enormous investment requirements and the need for a sound administrative environment, ADB's new technical aid will help review the passenger and freight demand structure and assist in preparing a reform plan to meet these challenges, said the specialist.

The study will research existing work carried out on China's railways, make use of experience with similar reforms in other railways, and help in preparing a policy reform plan that the Ministry of Railways can carry out.

Total cost of the study is estimated at 520,000 U.S. dollars' equivalent, of which the Ministry will provide about 120,000 dollars in counterpart funding for staff and official facilities.

The study is expected to be completed around September this year.

ADB focuses on the development of railways in the China's less developed inland provinces to promote growth and reduce poverty.

The bank has provided 13 loans totaling 2.64 billion U.S. dollars to finance construction of about 1,900 km of provincial railways operated by joint ventures with the Ministry of Railways and 4,600 km of new railways lines under national railway projects.

Source: Xinhua