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September 14, 2010

Californias high speed rail getting loan offers and bids from Japan, South Korea and China

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Japan's transport minister offered loans to support California’s more than $40 billion high-speed rail project.

Schwarzenegger visited Tokyo as part of an Asian tour as he looks for contractors and funds to help with a high-speed rail network that will include a route between Los Angeles and San Francisco. Japan is offering a loan to California, which faces a $19.1 billion deficit, to help companies including East Japan Railway compete with Chinese, South Korean and European rivals.

California’s planned network would whisk travelers between Los Angeles and San Francisco in 2 hours and 38 minutes. The journey takes six to eight hours by car or one hour by plane. California expects bids from about 10 trainmakers for the project, and construction may start as early as the first half of 2012, the California High Speed Rail Authority said earlier this year. The railroad would eventually be extended to San Diego.

China’s Ministry of Rail yesterday signed a memorandum of understanding with the Bay Area Council, an advocacy group for businesses in the San Francisco region, to help it find partners in California for a bid on high-speed rail work, John Grubb, the council’s vice president for external affairs, said in an e-mail today. While the agreement isn’t exclusive, China is the only country and potential bidder that has asked, Grubb said.


China has invested huge prestige, and tens of billions of dollars, in its high-speed rail industry — building on mostly European know-how acquired in joint ventures with Siemens AG, Alstom SA and to a lesser extent Japan's "Shinkansen" bullet train operators. It is gearing up to fight for a chunk of what Unife (the Association of the European Rail Industry) estimates to be a 122 billion euros ($155 billion)-a-year global market for railways.

China's experience in gradually raising the speeds of its train systems and then adding high-speed rail, sometimes on dual-use tracks, may give it an edge in designing systems suitable for the U.S., which in most areas plans a similar incremental approach.

South Korea's KTX high-speed rail, which is based on France's TGV technology, shares the same advantage, said Kim Seok-gi, director of the international railroad division at South Korea's Ministry of Land, Transport and Maritime Affairs.

South Korea is "absolutely interested" in California's projects and meanwhile is preparing a bid for a high-speed rail project in Brazil linking Rio de Janiero, Sao Paulo and Campinas


Schwarzenegger announced plans for Silicon Valley to bid for the 2020 World Expo.

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