China Railway Group Ltd, the world’s second-largest publicly traded heavy construction company, said it is in talks with South Africa’s government for a $30 billion high-speed rail project between Johannesburg and Durban.
Discussions are at an early stage and no funding is in place, China Railway Chairman Li Changjin said in an interview in Beijing today. China Railway has signed an agreement with Standard Bank Group, Ltd, Africa’s biggest lender, Li said, without elaborating.
Ross Linstrom, a spokesman for Johannesburg-based Standard Bank, declined to comment in a text message today. The lender sold a 20 per cent stake to the Industrial & Commercial Bank of China in 2008 as part of a plan to profit from growing trade between Africa and China.
South Africa’s government said in April it was studying the feasibility of a high-speed railway link between Johannesburg and the eastern port of Durban, South Africa’s busiest harbour. Driving the 566 kilometres between the two cities takes between five and seven hours, while a high-speed train would complete the trip in about three hours, according to the Transport Ministry.
South Africa is hoping Chinese state-owned banks can provide loans for the project, Li said on the sidelines of a China-Africa investment forum, while China Railway wants South Africa to contribute as much as 40 per cent of the capital.
Africa’s first rapid rail line began operating on June 8 this year between Johannesburg’s main airport and the business district, with the project expected to cost 25.2 billion rand ($3.4 billion).
South African President Jacob Zuma is in China this week to discuss investment opportunities. At the talks today China’s Railway Minister, Liu Zhijun, and his South African counterpart signed a memorandum of understanding on cooperation for “railway-related matters.”