By Geoffrey York
Lhasa, July 10 : Canadian investors have found a new way to exploit the Tibet boom. They are launching a luxury train that will charge each passenger about $1,000 (U.S.) a day for lavish services and panoramic views of this long-isolated mountain land.
The investors, a primarily Canadian group that includes former Canadian ambassador Howard Balloch, are pumping $100-million to $200-million into the venture, which will cater to wealthy tourists with a hankering to see the "roof of the world" in high style.
Passengers will enjoy around-the-clock butler service, on-board guides, broadband Internet, flat-screen televisions, DVD players, queen-sized beds, full bathrooms and showers, a lounge car, gourmet meals, extra-large windows, and 10-square-metre suites that will be the largest of any luxury train.
It is the first time that China's secretive Railways Ministry has agreed to loosen its monopoly and allow a foreign company to operate on the Chinese rail system.
The project aims to take advantage of the tourism boom triggered by China's new high-altitude railway to Tibet, which opened on July 1. But it will also face protests from exiled Tibetan activists who have vowed to oppose the project.
The investors, known as RailPartners, have signed an agreement with the Chinese Railways Ministry to form a joint venture to operate the trains. After receiving a final document from the government, expected soon, they will begin operating the luxury trains in late 2007 or early 2008, with the ministry providing the locomotives and access to the railway line.
Bombardier's joint venture in China has agreed to manufacture 53 cars for the company, beginning this year. Design and engineering work is already under way.
"People are travelling to places that outsiders never visited before, and many of them are better-heeled people," said Mr. Balloch, a former Canadian ambassador to China who now heads Balloch Group Ltd., a financial advisory and investment banking firm in Beijing.
"I think people are interested in special and novel travel in out-of-the-way places. There's a high level of interest in Tibet and the back and beyond of China."
As one of the investors in the RailPartners project, Mr. Balloch helped guide its organizational work in China. He said he has been invited to join the company's board of directors.
RailPartners plans to seek bank financing as soon as it receives the final go-ahead from the Railways Ministry. One report in Hong Kong said the company would ask a French bank to arrange $130-million in financing over 15 years.
RailPartners was founded by TZG Partners, a U.S.-owned real-estate and hospitality company in Shanghai. But now the RailPartners investors are largely from Canada, so the company considers itself Canadian.
"The concept for the luxury trains began four years ago, when we realized it was difficult for high-end tourists to visit the top places in China," said Ben Tsen, managing director of TZG Partners. "Flying is boring and driving is difficult."
The company is touting its Tibet project as "the most magnificent train" in the world. The trips will be marketed worldwide, mainly to Americans, Europeans, and wealthy Asians, including the emerging Chinese nouveau riche class.
"China is really crazy for luxury products, and this market is growing rapidly," said William Edward, vice-president of marketing and sales at RailPartners.
The train concept is inspired by eight or nine luxury trains in other countries, including the Orient Express in Europe and Canada's own Rocky Mountaineer.
The company plans to send a 16-car train to Tibet every three days, with a maximum of 96 passengers aboard -- far fewer than the 900 passengers on the regular trains to Tibet.
Each trip from Beijing to Lhasa will take five days, instead of the standard two days, allowing passengers to stop for sightseeing at historic towns such as Xian and Pingyao with expert guides. RailPartners is also planning to build luxury resorts at several stops along the railway.
The railway to Lhasa climbs over permafrost and mountain passes of more than 5,000 metres. It is the highest railway in the world.
Some Tibetan activists are planning to hold protests against the luxury trains. Students for a Free Tibet, based in New York, is calling for a tourist boycott of the railway.
"It is appalling that Canadian companies are profiting from luxury travel on this railway line which is a cornerstone of China's colonial policy in Tibet -- a policy that includes forcibly resettling Tibetans onto reservations and their children into residential schools," said Lhadon Tethong, executive director of Students for a Free Tibet.
"Luxury travel on the Tibet railway will provide the Chinese government with essential funding to keep this destructive line in operation," she said. "Canadian complicity in this overtly political project is shameful and unacceptable and we will actively campaign to hold the key players, including former ambassador Howard Balloch, accountable for their involvement."
Mr. Balloch said he wouldn't be surprised if protesters target the company, but he rejected their arguments. "I think they are mistaken. I think it's a good thing if more money is pouring into Tibet."
Ivor Warburton, general manager of operations for RailPartners, said he doesn't expect any problems from protesters. "We are committed to the community," he said. "Our attitude is one of responsible tourism."