Report of China Rail Section Collapse Jolts Shares

March 12, 2012
Part of a high-speed railway line that had already undergone test runs collapsed in central China following heavy rains, state media reported Monday, jolting railroad shares and reviving worries over safety.

Shanghai -- Part of a high-speed railway line that had already undergone test runs collapsed in central China following heavy rains, state media reported Monday, jolting railroad shares and reviving worries over safety.

The official Xinhua News Agency and other reports said a 300-meter (984 feet) section of the railway line had collapsed, but mentioned no casualties or other details. It said hundreds of workers were rushing to repair the line between the Yangtze River cities of Wuhan and Yichang.

The reports of the accident Friday near Qianjiang city in Hubei province, the latest since a bullet-train crash last summer that killed 40 people, rattled share markets in Hong Kong and Shanghai, where major railway company stocks dropped on the news.

China Railway Construction Corp. dropped 6.6 percent, China Railway Group Ltd. fell 5.7 percent to HK$2.82 and China Southern Rail lost 4.4 percent. All are traded in Hong Kong.

China has massive resources and considerable prestige invested in its showcase high-speed railways program, and the news appeared to raise sensitivities over the issue. A local government website ran an article denying that any collapse had occurred.

An officer who answered the phone Monday in the information office of the China Railway 12th Bureau Group Co., which is in charge of the project, said he had not heard about the collapse and said no other officials were available for comment. The official refused to give his name or title.

Officials in the Hubei Province and Qianjiang city information offices were also not available for comment. The Railways Ministry did not immediately respond to inquiries by phone.

China has 13 high-speed railways in operation, with 26 under construction and 23 more planned. Much of the system, similar to that in Japan, is built on elevated tracks.

Engineers working on some projects have complained of problems with contractors using inferior concrete or inadequate steel support bars. A report last week by the state-run magazine Time Weekly reported allegations that builders on another section of the same Wuhan-Yichang line may have compromised safety by substituting soil for rocks in the railway bed.

The railway line is due to open in May.

Authorities slowed expansion of the multibillion-dollar bullet train system following the July 23 crash near Wenzhou, in southeastern China. It was triggered by a lightning strike, though a government probe also blamed faulty signal systems and missteps by train operators.

Since the Wenzhou crash, there have been reports of problems with brakes, signaling systems and faulty construction. In one case the Railways Ministry ordered almost all of a $260 million railway line in northeastern China redone after finding contractors had farmed the work out to unqualified construction companies that filled railway bridges' foundations with rocks and sand instead of concrete.

A report by World Bank experts issued last week lauded China's success in rapidly expanding the system, which is due to grow to 10,000 miles (16,000 kilometers) of track by 2020 from 3,700 miles (6,000 kilometers) as of last year.

That report said it was unclear whether the speed of the buildup had compromised safety, but noted that the Wenzhou accident showed there was "room for improvement."

In an interview with Xinhua, Huang Qiang, chief researcher with the China Academy of Railway Sciences, said Beijing is continuing a safety overhaul of high-speed railways that includes development and improvement of signaling equipment, train maintenance and protection against lightning and earthquakes.

"China's high-speed railway development has been aggressive in previous years, in which some important links were missed," Xinhua quoted Huang as saying.

Still, the government says it intends to push ahead with the program.

China is due to spend 400 billion yuan ($630 billion) this year on railway infrastructure, down from 469 billion yuan in 2011 and over 700 billion yuan in 2010.


Researcher Fu Ting contributed to this report.


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