Smart Railway Solutions Adding Hi-Tech Communications Cash Flow Values To Belt And Road Rail Infrastructure Builds

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While a great deal has been written about China’s global railway infrastructure build, with a recent case being the opening of the China-Laos railway, an equally, if not more important aspect is the leveraging of the tracks and concrete to provide a faster, digital communications network.

The new China-Laos rail link features Huawei’s Smart Railway Solutions, with Huawei working closely with Laotian telecom operators to build a high-speed network along the high-speed line. The stable connection it provides will benefit passengers, as well as rural residents along the way.

In fact, smart railway march is already well underway – and on a global scale is set to grow by $16.32 billion in the next three years. Much of that growth is centered on Huawei, as an estimated 29% of the market’s growth will originate from the Asia-Pacific region for the smart railway systems market, with China is a key market for smart railway systems in APAC. Market growth in this region will be faster than the growth of the market in the EU and the United States. The emergence of megacities and the rise in investments in the development of the railway network will facilitate the smart railway systems market growth in the Asian and African regions.

The main driver behind Smart Railways is efficiency. Advanced technologies such as automation, artificial intelligence (AI), and machine learning have the potential to revolutionize the railway industry. The implementation of digital technologies will lead to operational efficiency, cost benefits, higher customer value, and faster and better services in the railway sector. Integrated security, predictive maintenance, and asset management are a few of the new areas of technology deployment.

This will result in standardization, transparency, and scalability in the data, which operators can then use to gain better insights and increased efficiencies. It will also open up various Asian and African hinterlands, where otherwise remote, often agricultural regions can be better connected to global communications just by being near a railway line. That in turn will boost local economies.

At present the market is somewhat fragmented, and globally dominated by just a handful of players, Huawei are among them along with ABB, Alstrom, Bosch, Cisco, IBM, Hitachi, and Siemens – some consolidation and collaboration can be expected in future years.

Adding these services to the hardcore infrastructure is indicative of something we’ve been pointing out for the past three years – the key to understanding the BRI’s next phase is that China – and other players such as Laos – are now exploiting the infrastructure build to develop cash-flow generating businesses on top of the base development.

With 117,500km of railway part of the Trans-Asian interconnecting rail network, 50,000km in China alone, and 65,000km in Africa, the opportunities to leverage rail networks to improve communications and services, while providing new business opportunities are huge. Smaller countries such as Laos will find that cashflow developments materialize after the infrastructure build – a key and little appreciated factor in criticisms of ‘debt traps’ and China loans.

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About Us

Chris Devonshire-Ellis is the Chairman of Dezan Shira & Associates. The firm assists British and Foreign Investment into Asia and has 28 offices throughout China, India, the ASEAN nations and Russia. For strategic and business intelligence concerning China’s Belt & Road Initiative please email silkroad@dezshira.com or visit us at www.dezshira.com

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