CHINA is considering the merger of two state railway equipment producers to enhance the country's high-speed rail exports, which if approved, would create the world's biggest rail company, reports London's Financial Times.
Many countries are considering high-speed rail, and both the China North Locomotive & Rolling Stock Corp (CNR) and the China South Locomotive & Rolling Stock Corp are bidding, offering low prices and easy financing. Chinese high-speed rail projects in Burma, Thailand and Laos begin this year and bids on US high-speed rail projects are expected.
The merged company would also control more than 90 per cent of the Chinese rail equipment market. CSR and CNR have already announced plans to boost income more than three fold in five years, to US$22.6 billion and $21.1 billion respectively.
The merger is backed by the Ministry of Railways and the state asset regulator, because it would assist China making offshore bids, but it is opposed by other ministries because it stands to weaken domestic competition.
Merging the two and their many units - some publicly listed, others in joint ventures and some in agreements with international rivals, is expected to be a complex job.
(Source:www.schednet.com)
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