China to launch $13.2 billion railway project connecting Xinjiang via Tibet, with parts running near LAC. Details here

China is set to launch an ambitious railway project connecting Xinjiang province with Tibet, with parts of the line running near the Line of Actual Control (LAC), the de facto border with India. The Xinjiang-Tibet Railway Company (XTRC), wholly owned by China State Railway Group, has been registered with a capital of 95 billion yuan (USD 13.2 billion) to manage the project, which is expected to begin construction this year, as per media reports.

"This ambitious project aims to establish a 5,000 km plateau rail framework centred on Lhasa by 2035," said Hubei-based Huayuan Securities in a research note. The project’s cost is expected to exceed the initial funding, with the 1,800 km Sichuan–Tibet Railway, costing 320 billion yuan (USD 45 billion), as a benchmark.

The railway will span 2,000 km, linking the Lhasa–Shigatse line with a new Hotan–Shigatse section, creating a strategic corridor between China’s northwest and southwest. "Parts of the route will also run near the China-India Line of Actual Control (LAC), the de facto border between the two countries, giving it defensive importance in a frontier area with less infrastructure than the rest of China," the SCMP report noted.

This follows China’s Xinjiang–Tibet Highway (G219) through the disputed Aksai Chin area, a flashpoint in the 1962 war, which India claims as its territory.

The railway, one of four planned lines linking Tibet to other regions, will traverse extreme terrain at an average elevation of 4,500 meters, crossing the Kunlun, Karakoram, Kailash, and Himalayan ranges, glaciers, and permafrost, with winter temperatures dropping to -40°C and oxygen levels at 44% of inland regions. These conditions pose significant engineering and environmental challenges. The Qinghai–Tibet line is operational, while Sichuan–Tibet and Yunnan–Tibet lines are under construction.

Planning began in 2008 under the National Development and Reform Commission’s railway network plan, with tenders for the Hotan–Shigatse section issued in 2022. Tibet already has robust connectivity, including a high-speed rail near Arunachal Pradesh. China is also building a USD 170 billion dam on the Brahmaputra River, raising concerns in India and Bangladesh.

The project coincides with improving India-China ties after a four-year freeze due to the 2020 Ladakh standoff, including Aksai Chin. Relations warmed after a 2024 meeting between Prime Minister Narendra Modi and President Xi Jinping at the BRICS summit in Russia.

Modi is expected to attend the Shanghai Cooperation Organisation summit starting August 31.  The XTRC’s scope includes real estate, tourism, and international contracting, per the SCMP.