The city of Urumqi in the Xinjiang Uygur autonomous region began constructing a site capable of producing tunnel-boring machine at its Economic and Technological Development Zone in Toutunhe district, on June 26.

With investment from China Railway Construction Heavy Industry Company, the site will cost a minimum of 1 billion yuan ($16.11 million) to complete. The site will occupy 142,667 square meters and is expected to be put into operation by July, 2016.

The tunnel-boring machines produced at the site will be sold to interested parties in Xinjiang, Central Asia and Europe. The machines will play an important role in the construction of Urumqi’s subways.

At the opening ceremony for the site, Liu Feixiang, president of China Railway Construction Heavy Industry Company, said that they chose Xinjiang as the location of the site due to its geographical proximity to Central Asia.

“Xinjiang is a central area along the Silk Road Economic Belt and is China’s portal to Central Asia and Europe. The region, therefore, will put great effort into constructing infrastructure in the very near future. It will inevitably have a growing demand for tunnel-boring machines,” added Liu.

The Silk Road Economic Belt is to be established along the ancient trade road that starts from China and stretches to Central Asia and Europe. The initiative was put forward by Chinese President Xi Jinping during his visits to Kazakhstan and Indonesia in 2013.

It will cost as much as 3 billion yuan to transport a tunnel-boring machine to Xinjiang from Hunan province, the location of the company’s headquarters, accounting for 5 to 8 percent of the machine’s total price. The new site will strengthen the company’s competitiveness by cutting costs in transportation and logistics.

China Railway Construction Heavy Industry Company was founded in 2007. It specializes in the research, design and production of high-end equipment for underground tunnel construction. The company has built 11 research institutes and several production sites in the provinces of Hunan, Sichuan and Gansu, and the municipality of Beijing.

By Yang Fan and edited by Jacob Hooson