China Train Crash Was Avoidable: Safety Agency

A high-speed train crash that killed 40 people in China last month “could have been avoided,” according to the agency leading the official investigation.

The crash exposed faults in the design of the signaling system that was blamed for the accident as well as shortcomings in emergency and safety-management systems, Huang Yi, a spokesman for the State Administration of Work Safety, said in an interview yesterday with state-run Xinhua News Agency. He didn’t elaborate on the flaws identified.

“The accident should not have happened,” Huang said. “It could have been avoided and prevented.”

The agency, due to complete an investigation into the crash next month, will find the people and businesses responsible, Huang said. China has also recalled trains, pared services and slowed high-speed locomotives to boost safety following the accident.

“The accident and the measures taken in the aftermath are a crushing blow to China’s rail sector,” said James Chung, an analyst with Masterlink Securities in Shanghai. “But, of course, the most important thing for China is to avoid such tragedy happening again.”

Separately, the head of the Kunming Railway Bureau, Wen Qingliang, was removed, Xinhua said on its website, citing Ta Kung Pao, a Hong Kong-based newspaper. Calls to four different numbers at the rail ministry went unanswered.

Services Canceled

Shanghai’s rail bureau said Aug. 21 it will cancel 18 daily high-speed services on lines to Beijing and Hangzhou. The cuts include two trips a day in each direction on the Beijing line and seven each way on the line to Hangzhou. The reductions will begin Aug. 28.

The bureau made the cuts for scheduling reasons, it said without elaboration. Earlier reductions after a train recall pared the number of daily services on the Beijing-Shanghai line to 66 each way from 88.

The Shanghai bureau will continue to operate trains on the line at 250 kilometers per hour (155 miles per hour) or 300 kph, it said. The 221 billion-yuan ($35 billion) line began operations on June 30.

The number of services on the Shanghai-Hangzhou line will decline to 83 a day in each direction from 90, the Shanghai bureau said. The tally will include 48 services operating at 300 kph, which will be the new top speed, down from 350 kph.

Lower Fares

“The cut in speed is a rational choice for the government as it can enhance safety and affordability,” said Zhao Jian, a professor of economics at Beijing Jiaotong University. “Abandoning the old ‘Great Leap Forward’ style of rail development, which wasn’t rational, is also what China needs.”

First-class tickets for a one-way trip to Hangzhou from Shanghai will drop to 124 yuan from 131 yuan, the Shanghai bureau said. Second-class fares will be reduced to 78 yuan from 82 yuan. That’s in line with an earlier ministry announcement that fares will be cut nationwide by about 5 percent on average.

The service changes come after China CNR Corp., the nation’s second-biggest trainmaker, said on Aug. 11 that it was recalling 54 high-speed locomotives to ensure safety standards. The move followed a government order for safety checks, the Beijing-based company said in a statement.

The trainmaker’s CNR Changchun Railway Vehicles Co. unit yesterday denied the recall was prompted by faulty axles. No cracks have been found in such parts, Vice President Zhao Minghua said by phone. Caixin’s New Century Weekly earlier reported on its website that axles were the cause of the recall.

China CNR recalled the trains because of issues related to sensors, which could affect punctuality, Zhao said. She didn’t elaborate.

Stocks Plunge

Rail-related stocks have plunged since the accident on concerns that it will disrupt the government’s plans to spend 2.8 trillion yuan on railways through 2015.

China CNR has slumped 29 percent in Shanghai trading since the crash. It was little changed at 4.59 yuan in early trading today. Larger rival CSR Corp. has fallen 35 percent in Hong Kong since the accident and 25 percent in Shanghai.

The government has tightened rail safety checks, delayed new projects and slowed high-speed trains nationwide following the crash near Wenzhou last month. That accident occurred after a train that had stopped following a lightning strike was rear- ended by a second locomotive. A preliminary investigation attributed the accident to a signal fault.

Officials Fired

Three officials in the Shanghai rail bureau were fired following the crash. The bureau oversees operations in the area of the accident. A rail ministry spokesman who was criticized for explanations following the crash was also moved to a position in Warsaw.

China appointed Sheng Guangzu as rail minister in February after predecessor Liu Zhijun was removed amid a bribery investigation, state-run Xinhua News said at the time. Liu championed construction of the high-speed rail network, which opened in 2007 and is due to reach 16,000 kilometers (9,900 miles) by 2015.

The rail ministry said in April that it planned to slow high-speed trains and cut ticket prices to help boost passenger numbers. That included paring the planned maximum speed on the Beijing-Shanghai line to 300 kph from 350 kph.

To contact the reporter on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net

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