Beijing: China introduced its first high-speed rail service in 2007. By 2014, the network extended to 16,000 kilometers, propelling the country into the “high-speed rail era,” reports the Chinese-language Economic Observer.
The high-speed rail industry has sought to develop and upgrade the quality of ancillary services, especially at stations. The annual business revenue of China’s train stations has exceeded 10 billion yuan (US$1.6 billion), but there are some strategic problems that need to be addressed to create greater value.
From the early days of rail travel in China, the approach of the railway administration was “managing passengers” but over the years, it gradually changed to “serving passengers.” People no longer had to get through security checkpoints just to see off a passenger or shop at the station’s stores, which was a significant break with the past.
After the 2011 Wenzhou high-speed train collision that killed 200 people, blame for which was attributed to design flaws and sloppy management, the operational mode at train stations has returned to “managing passengers.” The reversion was based on considerations of transportation service and safety, but it resulted in business losses.
If an open style of management is put back into practice, the annual revenue from ancillary railway business could increase by more than 15% — a conservative estimate, according to the report.
By 2010, China had the most rapidly developing high-speed rail network worldwide. It now has the longest high-speed rail network, highest number of operational hours, the largest scale of construction and the most comprehensive technology on its rail system. However, political and economic factors and population concerns in other countries have restrained China from going global with its high-speed rail technology.
For a long time, China has been focused on building railways rather than gaining revenue from the railway business. Because of China’s vast size and population, it is difficult for its railway administration to drop the old approach of building more railways.
But it is time for the railway administration to give equal attention to developing ancillary railway business, especially regarding high-speed rail.
China also needs to take steps to secure bids for high-speed rail construction in developing countries and allay their misgivings about possible losses on such projects.