China Railway Container Transport Corp., a state-owned company under the control of the Ministry of Railways, has established a joint venture that includes France's CMA CGM, German rail operator Deutsche Bahn and Israel's Zim Logistics to design, build and operate a network of 18 rail freight terminals across China.

The rail terminals will be dedicated to handling container freight and located in transport hubs such as Shanghai, Kunming in the southwest and Urumqi in the northwest. The terminals are scheduled to begin operations in 2010.



A report by AFX News says the parties involved in the deal have described it as the first large-scale foreign investment into China's railway industry, marking the opening up of a sector that has traditionally come under stringent state control.



A total of CNY12 billion (US$1.57 billion) will be invested into the joint venture, which has been named China United International Rail Containers Co.



China Railway Container Transport will be the biggest stakeholder with a 34 per cent equity interest in the joint venture. CMA CGM, Deutsche Bahn and Zim Logistics will each hold an eight per cent share.



This development comes amid plans for China to extend its current railway network by 20,000 kilometres to 100,000 kilometres by 2020, to meet growing economic demand, the report added.