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TheStreet Open House

Bus Makers and China's Eco-Transit Plan

TAIPEI ( TheStreet) -- Much of China saw air pollution shoot up so severely on the second weekend of January that authorities warned people in the capital, Beijing, to stay inside and called off construction projects that are ever kicking dust skyward.

The density of air particles smaller than 2.5 microns had exceeded 900 micrograms per cubic meter in Beijing, the highest in at least a year, official media said. The ideal level is below 25 microns per cubic meter.

Purely by chance, the Asian Development Bank also announced this month that it would help China lease 5,000 eco-friendly public buses by 2018. The buses for urban mass transit will "help avoid" 1.31 million tons of greenhouse gas emissions per year and give a lift to millions of low-income commuters, the lender said.

The clean-burning bus comes just in time as pollution from construction, industry and traffic threaten the respiratory health in a country already rife with everyday viruses.

Buses would supplement existing eco-friendly fleets in China that run on compressed natural gas or liquefied natural gas. Electric and hybrid buses may also hit the roads, according to the 2018 plan.

China will benefit from $275 million set aside by the Bank for five financial leasing companies to hire the buses, says the Manila-based regional lender that normally focuses on poverty relief projects.

The country has lagged in green mass transit due to a "funding bottleneck in financial leasing companies and bus operators," Asian Development Bank private sector Director General Philip Erquiaga says in a statement. So the lender, with 67 members, will help to establish long-term finance and co-financing to fill the gap.

China should breathe easier as it's generally keen to reduce pollution and dependence on fossil fuels by pushing drivers to buy cleaner vehicles. The government has set a target of half a million electric or hybrid vehicles on the road by 2015 and five million in 2020. It's not even close yet to the first goal.

An Asian Development Bank publicist would not name any specific bus providers for the China program, but it's clear who some of the industry giants are, in case bids are opened to anyone from anywhere.

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