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Last Updated: Sunday, 29 August, 2004, 16:24 GMT 17:24 UK
China to modernise rail routes
A railway worker takes a rest
China's rail network needs modernising
China has awarded contracts to three foreign firms with the aim of modernising its congested rail network, the state-run media has reported.

China's railways have proved unable to keep up with the needs of its booming economy, causing freight bottlenecks that have contributed to inflation.

The deals went to Alstom of France, Bombardier of Canada, and Kawasaki Heavy Industries of Japan.

They will upgrade five intercity lines to increase train speeds.

Fast tracking growth

Financial details of the three deals were not given, but the overall cost of the modernisation programme is reported to be approximately $900m (502m).

The contracts will enable China to ease freight bottlenecks by improving more than 2,000 kilometres of track to enable trains to run at 200km an hour (124 miles per hour), the Xinhua news agency said.

The three firms all won their contracts in conjunction with Chinese partner companies.

China is struggling to modernise its infrastructure. It has built many new roads to have cut transport times and help open up poorer, inland areas.

But China's sparse and congested rail network remains a major route for freight.

Until a few years ago, rail travel was rationed by complex restrictions on sales of passenger tickets.

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