China gives bullet-train contract to Japan

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A consortium of Japanese firms led by Kawasaki Heavy Industries Ltd. won a $12 billion contract to provide high-speed trains to China, Xinhua news agency said on Monday.

A consortium of Japanese firms led by Kawasaki Heavy Industries Ltd. won a $12 billion contract to provide high-speed trains to China, Xinhua news agency said on Monday.

The report did not give the exact terms of the contract, which aims to double speeds on five lines in eastern China to 120 miles per hour.

The lines, including one between Beijing and the northeastern industrial city of Shenyang and another from Qingdao to Jinan in eastern Shandong province, stretch more than 1,200 miles.

Details were muddied by other reports and by Kawasaki Heavy itself, which said a deal had not yet been signed.

Kawasaki Heavy, Chinese train maker Nanche Sifang Locomotive and five other Japanese companies had been bidding on the deal by pitching East Japan Railway Co.'s newest "Hayate" bullet train, which can hit speeds of up to 168 mph.

The five other companies in the Japanese consortium are Mitsubishi Corp., Hitachi Ltd., Mitsubishi Electric Corp., Itochu Corp. and Marubeni Corp.

On Sunday, Xinhua said the contract had been awarded to three groups, one led by Kawasaki Heavy, another with France's Alstom and a third headed by Canada's Bombardier Inc.

It gave no details, and Monday's report made no mention of those firms.

Asked for comment on Monday, Kawasaki Heavy said the bullet train contract had not been signed and that the three consortiums would share the deal.

The company said details of the project, including which rail sections would go to which companies, had yet to be decided.

China's push to modernise its creaking railway system, which is being increasingly strained by breakneck economic growth, has attracted many international firms, including Germany's Siemens AG.

Chinese authorities are also deliberating bids from several consortiums for a proposed 810-mile high-speed train connecting Shanghai and Beijing, a project potentially worth billions of dollars.

Siemens is part of the Transrapid consortium that built the world's first commercial magnetic-levitation train in Shanghai, a $1.5 billion project that began regular operation this year.

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