BEIJING, Feb 6 (Reuters) - China will start construction by late March on a 29.7 billion yuan ($4.35 billion) high-speed rail line connecting the cities of Shanghai and Hangzhou, Xinhua news agency reported on Friday.
Trains on the 159 km (100 mile) line will run at speeds of up to 350 km an hour, shortening the journey time to 38 minutes from more than one hour at present.
Shanghai’s mayor said in September that plans for the conventional high-speed line could delay the extension of the city’s maglev train line to Hangzhou, the scenic capital of adjoining Zhejiang province.
Xinhua quoted a a senior railway company official as saying that Baoshan Iron and Steel Co Ltd (600019.SS), Baosteel, would invest 2 billion yuan in the project.
The rest of the cost would be shared equally by the Ministry of Railways, Shanghai and Zhejiang, according to Yu Jian’er, chairman of Zhejiang Provincial Railway Investment Group Co Ltd.
Yu said the National Development and Reform Commission, the top economic planning agency, was likely to approve the project in mid-February. Construction would take two years, Xinhua said.
China is ramping up railway construction as part of a 4 trillion yuan stimulus plan announced in November to boost domestic demand in the face of flagging global growth.
Shanghai’s existing 30 km (18.6 mile) maglev, or magnetic levitation, line links its remote Pudong International Airport with a suburb, via trains that float along a magnetic cushion at top speeds above 400 kilometres an hour.
The world’s only commercially operating maglev train, it was partly developed and built by a German consortium including Siemens (SIEGn.DE) and went into service in 2003.
Chinese authorities hope to extend the maglev line to Shanghai’s domestic Hongqiao airport and then to Hangzhou.
The planned extension sparked protests a year ago by Shanghai residents who feared it would emit harmful radiation and bring down property values. ($1=6.833 Yuan) (Reporting by Alan Wheatley, Editing by Jacqueline Wong)