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UNCLAS SECTION 01 OF 02 GUANGZHOU 000564 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EINV ELTN KTDB CH
SUBJECT: Transportation Infrastructure in the Pearl River Delta 
(Part 2 of 2): Major Projects 
 
REFERENCE: 06 GUANGZHOU 17429 
 
¶1. (U) SUMMARY: Guangdong will initiate 62 major transportation 
infrastructure projects by 2010, requiring an estimated investment 
of RMB 550 billion (USD 71.5 billion).  Projects planned for 
Guangdong's Pearl River Delta (PRD) include 17 expressways, a fourth 
and fifth rail line linking Guangzhou to Hong Kong, the province's 
first underground light-rail linking two cities, and an expansion of 
Guangzhou's Baiyun International Airport.  This cable discusses 
specific projects by sector; septel describes overall planning and 
the role of foreign companies.  END SUMMARY 
 
Projects and Spending 
--------------------- 
 
¶2. (U) In its 11th Five-Year Plan (2006-10), Guangdong province as 
allocated RMB 550 billion (USD 71.5 billion) for 62 major 
transportation infrastructure projects, most to be started by 2010 
and most in the Pearl River Delta.   The plan forecasts 2,000 km of 
new expressway, 1,100 of railway, 270 km of light rail, and 262 km 
of metro rail.  The Guangdong government announced that it will 
spend RMB 48.5 billion (USD 6.3 billion) to improve transportation 
infrastructure in 2007. This is up from RMB 46.2 billion (USD 6 
billion) in 2006, which was 13 percent more than 2005. 
 
Roadways 
-------- 
 
¶3. (U) Guangdong has the second longest road network (3100 km) among 
China's provinces (the longest is in Henan Province at 3439 km). 
The PRD has plans for 17 expressway projects under the 11th FYP, 
some of which are extensions of existing roadways.  These roads will 
link the PRD with major cities in China's interior, such as Wuhan, 
Chongqing, and Xi'an.  A second expressway between Guangzhou and 
Shenzhen will be completed by 2009 with a total investment of RMB 16 
billion (USD 2.1 billion).  A Hong Kong firm is providing some of 
the investment for the highway as well as a new ring road around 
Guangzhou.  (The first Guangzhou-Shenzhen highway was completed 10 
years ago and was also Hong Kong-invested.)  An expressway linking 
Guangzhou to Zhuhai is also under construction. 
 
¶4. (U) The expansion of Guangzhou city's road network during the 
11th FYP will require an investment of RMB 50 billion (USD 6.5 
billion).  The city is currently building its second ring road and 
plans to complete its fourth ring road by 2010, according to 
Professor Fu Xinsha of South China Normal University.  However, 
Professor Fu said the speed of road construction does not match the 
city's needs, and identifying and fixing bottlenecks is a priority. 
Guangzhou is also building highways linking it to cities in central 
and northern Guangdong, such as Conghua and Heyuan. 
 
¶5. (U) A bridge linking Hong Kong with Macau and Zhuhai is still in 
the planning stages and waiting environmental assessments and 
approval from the three governments. It would extend 40 km and 
require an investment of RMB 55 billion (USD 7.2 billion). 
Observers estimate it will not be completed until at least 2012. The 
Guangdong government hopes this will spur development in the 
less-developed western half of the PRD. 
 
Railways 
-------- 
 
¶6. (U) Guangdong's top railway projects include extending the 
Beijing-Guangzhou and Shenzhen-Guangzhou lines. New rail will be 
laid to improve connections between PRD cities and Xiamen, Shaoguan, 
Zhanjiang, Nanning, Wuhan, and Luoyang. 
 
¶7. (U) Guangzhou is also focused on expanding its rail network, 
according to Chen Shanliu, Director-General of the Guangzhou 
Development and Reform Commission.  This includes two 
Guangzhou-Zhuhai rail systems: one light rail and the other cargo. 
Planners have also approved a fourth rail line from Guangzhou to 
Hong Kong, which will shorten the travel time from two hours to one 
hour.  Another cargo rail line - the fifth railway between the two 
cities -- is also in the planning stages. 
 
¶8. (U) Panyu, located 14 km south of central Guangzhou and a central 
point in the PRD, has been designated as a central transportation 
hub for rail and expressway networks, according to Chen Sanliu, 
Director-General of the Guangzhou DRC.  The hub station is scheduled 
for completion in 2008 and will require RMB 4.1 billion (USD 0.5 
billion) in investment.  The Panyu hub station will be the service 
point for the planned Wuhan-Guangzhou railway. 
 
¶9. (U) Panyu will also be a hub for the 560 km light rail network 
that will link Guangzhou, Foshan, Zhuhai, and Shenzhen. 
Construction will begin this year on Guangdong's first underground 
rail project to link two major cities -Guangzhou and Foshan.  The 
 
GUANGZHOU 00000564  002 OF 002 
 
 
project costs RMB 14.7 billion (USD 1.9 billion) and extends 32 km, 
according to news reports.  It will be completed by 2012 and at peak 
hours will be able to transport 40,000 passengers between the two 
cities hourly.  Already, more than 300,000 people commute between 
the two cities daily. 
 
Metro Rail 
---------- 
 
¶10. (U) Guangzhou and Shenzhen are rapidly expanding their metro 
rail systems in order to alleviate pressure on their roadways; 
Guangzhou is at times gridlocked with almost 2 million cars (and is 
adding 150,000 per year while Guangdong Province adds 600,000 per 
year).  Guangzhou currently has four metro lines in operation; lines 
three and four opened in December 2006.  Another four lines will be 
completed by 2010, expanding the system from the current 111 km to 
240 km.  Shenzhen plans to expand from its current two metro lines 
to six by 2010 (reftel).  Additional lines should improve linkages 
with Hong Kong. 
 
Airports 
-------- 
 
¶11. (U) CAAC has predicted that the air traffic in the PRD region 
will grow by 15-20 per cent annually from 2005 to 2010.  The PRD 
currently has major airports in Guangzhou, Shenzhen, and Zhuhai. 
Guangzhou's Baiyun International Airport, which opened in 2004, 
handled 26 million passengers and 650,000 tons of cargo in 2006 and 
is expected to see 40 million passengers and two million tons of 
cargo by 2010.  The airport recently began phase two of its 
construction, which will require investment of RMB 17.5 billion (USD 
2.16 billion) and which is scheduled to be completed in 2009. The 
expansion includes new cargo terminals, aprons, and a third runway 
that can accommodate the A-380.  The Guangdong DRC Deputy Director 
has stated that the government will retain a majority stake in all 
airport-related projects.  The airport will eventually be linked to 
other PRD cities by highway, railway, metro, and light rail.  FedEx 
will use the airport as its Asia-Pacific hub beginning in 2008. 
 
¶12. (U) Shenzhen International Airport is the fourth largest airport 
in China after Beijing, Shanghai, and Guangzhou airports in terms of 
passenger and cargo handling capacity.  To cope with fast-growing 
cargo demand, the airport plans to complete a new terminal and 
runway by 2008.  The Airport Authority of Hong Kong took over 
management of the debt-ridden Zhuhai Airport in October 2006 and is 
expected to focus on cargo transport.  The airport is beginning 
renovations, including a ferry service between airports in Hong Kong 
and Macao. 
 
Ports 
----- 
 
¶13. (U) Guangdong has the heaviest port traffic among China's 
provinces, according to Guangdong DRC's Zhang.  The province spent 
RMB 11.8 billion (USD 1.5 billion) on its ports in 2006 and its 
cargo throughput was up 14 percent.  Shenzhen is China's second 
busiest port city and Guangzhou is number three after Shanghai. 
Guangzhou ports' cargo volume is growing 20 percent annually -- 
largely because of the completion of deep-water Nansha Port in 
September 2004.  Nansha has 10 berths and will reportedly have an 
annual capacity of more than 10 million TEUs by 2010.  Guangzhou 
will spend RMB 26 billion (USD 3.4 billion) to expand its ports in 
the 2006-10 period, much of it going to new berths at Nansha. 
Guangzhou is also building a new highway connecting Guangzhou to 
Nansha. 
 
¶14. (U) Shenzhen's largest port, Yantian, plans to add six berths to 
its existing nine.  Hutchison Port Holdings, a consortium led by 
Hong Kong's Hutchison Whampoa, holds a 73 percent interest in the 
port, with the Shenzhen government holding the remainder.  Yantian's 
general manager Kenneth Tse told a visiting delegation in March 2006 
that rail and roadway bottlenecks are growing more severe in 
Shenzhen because of the rapid growth of the city's port activity. 
 
GOLDBERG