Korea Eyes $45 Bil. Train Deal in US
Korea Eyes $45 Bil. Train Deal in US
An upgraded KTX high-speed train awaits departure from Seoul Station to Daejeon, Thursday. It offers a better riding experience, according to its operator, KORAIL. Korea is trying to export its high-speed train. / Korea Times
By Do Je-hae
Staff Reporter
Can Korea pull off another surprise in a bid for a global infrastructure project?
Following its winning bid for the $20 billion project for nuclear power plants in the United Arab Emirates, Korea is vying for a $45 billion project to build a bullet train connecting San Francisco and Los Angeles, which is set to begin this year.
By all accounts, the competition will be fiercer.
Second Vice Minister Choi Jang-hyung of the Ministry of Land, Transport and Maritime Affairs visited California this week and signed an MOU with the California High Speed Rail Authority (CHSRA) Thursday.
The CHSRA has entered into similar information-sharing pacts with other countries with expertise in high-speed rail projects.
"China, Germany, Japan, Italy have signed the pacts and are competitors in the bid for the California high-speed rail project," the ministry said. "While the MOU does not immediately translate to Korea's acquisition of project, it does mean that the state government will consider an active review of Korea's plans."
In recent years, Korea's railway industry has had a series of overseas export success in the burgeoning high-speed rail markets in China and other parts of Asia as well as Africa. Korea is hoping to repeat its success in California, which recently acquired $2.25 billion in federal stimulus funds for the 1,280 kilometer high-speed rail between San Francisco and Los Angeles. The funds will be used for building its initial segment between San Francisco and Anaheim sometime this year, according to latest U.S. news reports.
Upon completion around 2018, bullets trains running at 350 km per hour will connect San Francisco and Los Angeles in as little as two and a half hours. The system will also link other major cities in the state, including Sacramento, San Jose, Fresno, Bakersfield and San Diego.
Hyundai Rotem is one of the companies that participated in a task force comprised of 17 public and private corporations to research the California project last year. Other participants are POSCO Engineering and Construction, Samsung SDS, GS E&C, SK E&C, Korea Railroad Corp. (Korail), Korea Rail Network Authority and the Korea Trade-Investment Promotion Agency (KOTRA). Officials from these companies visited California and presented Korea's engineering expertise in high-speed rail networks to local authorities in August 2009.
What are the chances that a Korean company secure the California project?
Korea and the state of California already enjoy a history of strong railroad cooperation.
In January, Hyundai Rotem exported 131 multi-level carriages for the Southern California Rail Authority's (SCRRA) Metrolink network in Los Angeles. Hyundai Rotem is the third-largest seller of urban metro passenger cars after Canada's Bombardier and France's Alstom, and currently has a plant in Philadelphia.
A global frontrunner in high-speed rail, Korea is one of a handful of countries in the world - after Japan, France and Germany - that has the capacity to build and operate a 350km/h high-speed train. A bullet train usually runs over 200km/h.
"Currently, Korea accounts for 0.5 percent of the world's rail market share. But prospects for exports are higher than ever, " Choi Yeon-hye, president of the Korea National Railroad College in Gyeonggi Province, said in a recent column. "For the past five years, Korea has demonstrated top skills in high-speed railway operations and maintenance."
Korea has been running a high-speed rail network with KTX trains since 2004. An upgraded version of the Korean-made bullet trains called the KTX II will start operations on March 2.
Korean companies have had much success in the growing Chinese railway market, having been selected to construct railways in Chongqing, Guangzhou and Harbin in recent years. Beating France and Italy, Korea won a bid to build a national railway network in Cameroon in June 2009, marking Korea's first railway operation in Africa.
Additionally, Korea has an edge in price competitiveness compared to consortiums from Japan and France, according to industry experts. Due to the financial burden of the project, price is a crucial factor for local authorities in selecting the consortium that will be tasked with a package of responsibilities from designing and constructing the railways and tunnels to operating signals and carriages.
Germany's Siemens has already set up operations in Sacramento, Calif. for the high-speed rail project.
Siemens' new breakthrough train, the Sapsan, is a candidate for the San Francisco-Los Angeles link. The Sapsan's top speed reached 400 km/h in test runs. They are currently used on the route between Moscow and St. Petersburg.
China is another tough competitor as it's determined to succeed in the railway market. It runs bullet trains that are faster than France's TGV. China will invest 823.5 billion yuan ($120.6 billion) in railways in 2010, including the construction of a high-speed train linking Shanghai and Beijing.
Experts say that how Korea does in Brazil's May 2 auction for contractors to build a $17.4 billion high-speed train link will be a true test of Korea's rail competitiveness. A successful bid there is expected to increase Korea's chances in California and other parts of the U.S.
jhdo@koreatimes.co.kr
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