China South Locomotive and Rolling Stock Corp (CSR), a Beijing-based state-owned enterprise specializing in the design, development and sale of rail transport equipment and solutions, announced in London on May 15 that it will set up a subsidiary in the UK.
The move is regarded as preparation by the Chinese enterprise for a plan to bid for Britain’s High Speed Two (HS2) construction project, and marks the official entry of the world’s largest manufacturer of electric locomotives to the European market.
The British government proposed the HS2 in 2012, which was approved by the House of Commons the following year. The total cost for the construction of the planned high speed railway line connecting London, Leeds and Manchester is around £50 billion (US$77.5 billion).
The HS2 project is planned to be completed in two phases. In the first phase, a railway will be built connecting London and Birmingham, at a cost of £22 billion (US$34 billion). Construction is scheduled to begin in 2017, with commercial operation set to kick off in 2026.
The second phase work will be the construction of a V-shaped rail system from Birmingham to Leeds and Manchester, with construction planned to start in 2033.
The UK at present has only one high-speed railway, which runs from London to Paris, passing through the Channel Tunnel.
Guangzhou’s 21st Century Business Herald reported that the HS2 budget for the procurement of trains reaches as high as £7.5 billion (US$11.6 billion), which attracted CSR to seek the deal.
Apart from that, CSR will also seek to provide HS2 with a series of services ranging from construction and operation to maintenance and repair, said Li Donglin, general manager of Zhuzhou CSR Times Electric, a CSR subsidiary.
CSR faces strong challengers on the HS2 project, however, including France’s Alstom, Germany’s Siemens and Japan’s Hitachi.
Zhuzhou CSR Times Electric first set foot in the UK in 2008, when it purchased 75% of the shares of British company Dynex Power, which controls technology for producing IGBT chips for the conversion devices used on electric trains.
After the acquisition, CSR set up a semiconductor research and development center, and in April, Zhuzhou CSR Times Electric spent £130 million (US$202 million) to achieve a complete buyout of British marine engineering equipment maker Specialist Machine Developments.
China has the world’s largest high speed rail network. As of the end of last year, the total length of high speed railways there reached 16,000 kilometers, accounting for over 60% of the world’s total.