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The train's scheduled debut is hailed by authorities as a significant breakthrough in terms of the domestic manufacture of rail transit vehicles, set against a backdrop of a boom in urban railway construction.

It will also mean a dramatic drop in the price of rolling stock, with the home produced cars costing much less, in some instances nearly half that of imported ones. Based on the technology of the French rail equipment giant, Alstom, the four-car train, to be followed by a further 16, will be used on the city's 17-kilometre light rail network running between Minhang and Xinzhuang (Xinmin Line), scheduled to be fully operational by next year.

Shanghai Alstom Transport Co Ltd (SATCO), a US$28 million joint venture between the French company and Shanghai Electric (Group) Corp, the trains' manufacturer, is expected to supply rolling stock for the Yangpu Line, another light rail system to be built in the city.

With an annual output capacity of 300 rail cars, the workshop of SATCO, located in the Minhang District, will also serve as a large-scale repair base, able to repair and service up to 1,000 rail cars annually, according to Lu Ruxing, chief engineer of SATCO.

"With their lower price and continuously improved functions, such home-made cars are a fine solution to meet the fast-growing domestic market needs," said Jiang Shangzhou, deputy secretary-general of the city government.

Company insiders say that the locally built stock destined for the Xinmin Line will be priced at US$800,000 for each car, a fairly competitive price compared with that of imported trains.

When the city's first metro line started operating in 1995, the rolling stock was all imported, with each car costing more than US$1.5 million.

Given central government's requirement that foreign companies find a domestic partner to cut the cost of rail construction, a number of global railway equipment producers like Alstom, Siemens and Bombardier have found their respective Chinese partners keen to tap the domestic market.

China now has a total of around 150 kilometres of urban rail transit lines operating in various major cities, such as Beijing, Tianjin and Guangzhou. Plans are afoot to build more than 800 kilometres of urban railway by 2010, not only in major centres, but also in medium-sized cities.

For Shanghai alone, which has 65 kilometres of rail network, up to 10 new lines totalling 212 kilometres will be constructed during the 2001-05 period.