Rapid increases in transport demand have accompanied the rapid economic growth of the People’s Republic of China (PRC) since 1978. During 1978–2003, total passenger transport grew by 9.2% annually, while freight transport grew at 7.1%. Railways were one of the primary modes of transport for long distance and bulk transport, accounting for 34.7% of total passenger-kilometers (p-km) and 32% of freight ton kilometers (t-km) in 2003. Between 1978 and 2003, railway freight grew by 4.8% annually, while passenger traffic increased by 6.1% per year.
Despite comprising 73,000 kilometers (km) in total length by the end of 2003, the country’s network density, in terms of railway-km per 1,000 square km of land, was only one third that of India and one-tenth that of Japan, and did not provide adequate coverage for the PRC’s population and land area. The existing capacity of the network was also being used very intensively, with the PRC having the highest freight transport density in the world and second highest passenger transport density globally, after Japan. Locomotive turnover was also the highest globally.
To address railway network capacity limitations, which had constrained the development of underserved areas such as the western region, the government adopted ambitious targets under its 10th Five-Year Plan, 2001–2005 and subsequent railway development plan up to 2020. Under the latter plan, it aimed to expand the country’s railway network to 85,000 km by 2010, and to 100,000 km by 2020, with priority given to less developed areas. The route network length in the western region was expected to reach 16,000 km by 2020.
The Dali–Lijiang Railway Project, approved by the Asian Development Bank (ADB) for a $180 million loan in December 2004, was designed to implement the railway upscaling plan in the landlocked, remote, and poor area in the northwestern part of Yunnan, one of the least developed provinces targeted by the government’s Western Development Strategy. The project was to develop an efficient, reliable, and affordable railway transport system to improve access and reduce transport costs and promote local economic development of the project area. The overall goal was to promote sustainable economic growth and reduce poverty in the northwestern part of Yunnan province.
At approval, the project intended to deliver three outputs: (i) 167 km Dali–Lijiang railway (DLR), including stations and access roads; (ii) employment opportunities for poor and vulnerable groups; and (iii) strengthened institutional capacity for the West Yunnan Railway Company (WYRC). The DLR was completed in full length in August 2009. So were 10 of its 11 planned stations, complete with modern equipment and facilities. The remaining station was finished in 2011. A total of 87,687 person-years of construction-related employment, comprising about 91% of the target, were created. About 55% of the 35,952 person-years unskilled jobs generated went to the local poor, minority groups, and women.
The project began trial operations in September 2009 and was put into commercial service in January 2011. Project funding for a marketing program to attract tourism and develop new industries along the DLR was reallocated to civil works. The development of a marketing strategy and business plan was instead funded by the executing agency, with assistance from the Kunming Railway Bureau. Implementation of the business development plan resulted in several service agreements with potential major clients and is expected to attract 4.7 million–8.4 million tons of freight traffic annually to the DLR during 2015–2019.
DLR operations significantly reduced travel time and cost in the project area. Whereas before, travel by road from Lijiang to Kunming took 17 hours and from Lijiang to Dali 8 hours, travel by train after the project took 9 hours from Lijiang to Kunming and 2 hours from Lijiang to Dali. Because of the project, people in the area can now easily travel to the major cities in the PRC by train. Travelling by train is safer, more convenient, and less costly, and has become the preferred mode for people frequently traveling out of the area and between villages. Many residents from Heqing county also take the train to Lijiang in the morning to sell their produce and return home by train in the evening.
As of project completion review (PCR), the DLR’s contribution to lowering the cost of living and prices of goods in the area was palpable. For instance, before the project, electronic goods were marked up 20%–30% compared with prices in Kunming; after the project, prices were only slightly higher than in Kunming. To promote the development of industrial sidings and increase freight traffic, the Ministry of Railways and WYRC have been making efforts to link the DLR to larger-volume railway customers, improve transport efficiency and service quality, and establish partnerships with business entities. Six industrial sidings were expected to be constructed, 3 of which were scheduled for construction in 2013, while the rest were still at planning stage, as of PCR time.
The WYRC was the project executing agency. The WYRC established a project management office, the Dianxi Railway Construction Headquarters, to take charge of day-to-day implementation.
