In December 2010, US-based iCD Research forecast that India and China are to be among the fastest growing railway markets in the coming 12 months.

"On the forefront of Asia’s frenzied railway activity is China, trying to push back the economic frontiers of Asia."

While the transport sector of the West is plagued by deficits and budget cuts, the once squeaky, unreliable and underfunded network in the Far East is on the upswing – fuelled by an economic rise, increasing domestic consumption, escalating demand for freight transport and passenger growth.

The forecasts have been proved correct. The past year has seen a railway boom that promises to tie South-East Asia closer together. China is at the forefront the development, spreading its networks all over South-East Asia and beyond. India, on the other hand, is still struggling with capacity constraints but has implemented plans to undergo major rail rehabilitation in the years to come.

Mongolia plans to expand its network into Russia, which in turn is still pursuing its plan of building a rail link via the Bering Strait to the US.

As different as the countries might be, they all have realised the economical benefits of a strong railway system. With their economic rise, billions goes into high-speed rail and new networks to connect cut-off areas, as well as improving passenger and goods flow – heralding a transport revolution in the Far East.

China: year of the railway?

On the forefront of Asia’s frenzied railway activity is China, trying to push back the economic frontiers of Asia. The rapid expansion of its high-speed network in the last years has gained a lot of international attention.

Yet its ambitions do not stop at the border. Despite aiming to build a continent-spanning high-speed rail link to Germany and the UK within the next ten years, it also drives the interconnectivity with its bordering countries in South-East Asia and beyond.

In February 2011, China signed an agreement with Kazakhstan to build a 1,050km line to the city of Almaty. Additionally, it will build a 1,215km cross-border railway together with Myanmar over the next three years from the Kyaukphyu deep sea port in Myan mar to Yunnan.

It is also in discussions with Thailand to jointly build a number of railway projects, including one from Bangkok to the Thai province of Rayong, and is currently building a $2bn railway to connect Tehran in Iran with Beijing.

China’s continuing involvement in Asia’s network is not without an ulterior motive, which is securing access to resources all over the world. State-owned China Metallurgical Group for instance plans to develop a 700km, $5bn track, linking Afghanistan, Pakistan and Uzbekistan within the next five years, mainly developed for the transport of ferrous and copper.

But not everything looks bright and shiny, as in May 2011, the development of a 421km, $7bn Lao-China high-speed track was stalled over social-environmental concerns. Perhaps worse, the government had to suspend more than 10,000km of rail projects following the high-speed accident at the end of July, which killed 40 people.

In addition, more than 80% of China’s current project will face construction delays as the Ministry of Railways was burdened by debts of $330.3bn at the end of June 2011. This, however, is of no distraction to the ministry. In November it allocated funds of $31.5bn to curb railway investment once again.

Mongolia looks to Russia

Fuelled by the growing mining industry in the country and its strategic location to Russia and China, Mongolia has grown to be one of the fastest developing economies in Asia.

"We should see advanced development of road and rail infrastructure and improvement in the investment climate in Russia as key."

In order to bolster the country’s sovereignty, the Mongolian Government adopted a plan in early November 2011 to extend the country’s railway infrastructure. It envisages the construction of a 1,100km railway, the construction of which will begin by the end of this year.

To make the most of its vicinity to Russia, Mongolia will also connect its industrial centres Dalanzadgad and Choibalsan, which are booming in the emerging resource-driven economy, to the Russian railway system.

This plan is a departure from the original one to connect the network to China, which would be more feasible as well as cost and time-effective as suggested by international experts, the World Bank and the Asia Development Bank.

However, Mongolia has decided for the more expensive option and leaves the connection to China for the future. Mongolian officials have emphasised that this route would better protect the country from possible Chinese economic and political pressure.

According to US-Mongolia Advisory Group president Alicia Campi, Mongolia finds Russia to be a more comfortable partner to work with than China, telling Eurasianet in 2010: "Russia’s partner since 1949 in Mongolia’s north-south border-to-border sole railway, are a known, basically reliable commodity to Mongolian policymakers and they share Mongolian concern over rapidly increasing Chinese penetration and monopolisation of north Asian economic trade."

Russia envisions the Bering Strait

Russia however has even more ambitious plans on its own. At the end of August the government approved a plan to build a $99bn, 104km-long underwater railway tunnel under the Bering Strait to connect Russia and the US – twice the length of the UK-France Channel Tunnel. The idea was first raised by Tsar Nicholas II in 1905, and was already proposed by the government once before in 2007.

Deputy federal representative for the Russian Far East Aleksandr Levinthal introduced the idea at a conference on developing railway infrastructure in the country once again, telling the Times: "We should see advanced development of road and rail infrastructure here [in the Russian Far East] and improvement in the investment climate in Russia as a key aim."

Engineers claim there is no technical reason for the tunnel to not to be built as the depth of the water offers little challenge and tides and currents are not severe. Russia aims to use the tunnel for freight and claims it could carry 3% of global transport of raw goods.

One significant factor of constructing the tunnel at this point is the fact it would provide China with an alternative route into US markets. Another purpose is to open it up for passenger travel between Europe and the US.

However, an additional 4,000km of new track would be needed to link it to Russia’s rail network, plus another 2,000km to connect it to existing services on the US side. The construction of the tunnel itself would take ten to 15 years. A first step has been made, when Russia’s President Dmitry Medvedev pledged in mid-November that railway will grow, especially the ones in the north of the country, which could directly link to the Bering Strait.

Rail rehabilitation in India

"One significant factor of constructing the tunnel at this point is that it would provide China with an alternative route into US markets."

In direct comparison with its neighbours, India’s rail network, which is the oldest in Asia, seems overburdened and out-of-date.

It carries some 17 million passengers and 2 million tons of freight a day and most of its major corridors have capacity constraints requiring radical improvement.

In order to tackle the constraint, Indian Railway Minister Mamata Banerjee announced at the end of February 2011 the highest-ever investment outlay of $12.71bn for rail upgrades in the year beginning on 1 April 2011. She said as much as 1,300km of new lines would be built in 2011 / 2012 only, compared to the post-1950 average of 180km to meet rising travel and freight demand in the world’s second-fastest growing major economy.

In addition, 236 stations would be upgraded throughout the country, as well as 68 new trains would be implemented, including nine non-stop ones between major cities. The government also set itself the goal of rail accounting for 50% of inland freight movements by 2020 from currently 35% in 2009.

As part of the plan, India will also build a rail link into Bangladesh, in a bid to enhance people-to-people contact and boost bilateral trade and investment between the two countries. China also eyes into India, showing keen interest to have a high-speed rail link through Manipur areas. At present, it is carrying out a major project on its borders to establish links with India.

India itself has seemingly been cautious toward the construction of a high-speed link – even within its own borders. Only in summer 2011, Indian Railways Construction assigned a UK company to conduct a pre-feasibility study for a potential high-speed rail within the country. If the project goes through, the track will ultimately also connect the two biggest economies in South-East Asia.