(Yicai Global) March 20 -- Chengdu Xinzhu Road & Bridge Machinery Co. will cooperate with Germany's Max Bögl Group in the development of a new-generation medium-to-low speed maglev system to obtain exclusive rights to use the latter's relevant technology in China.

Xinzhu and Max Bögl Group's unit, Max Bögl International SE, signed a technology licensing agreement in Sengenthal, Germany, on March 15, said a statement from the Chinese transport equipment developer yesterday.

With the assistance of the German licensor company, Xinzhu will establish a maglev technology test line in Chengdu for testing, verification and demonstration of the system. The maximum test speed will reach at least 160 kilometers per hour, said the statement.

The Chinese company will obtain rights for the exclusive use of the licensor's proprietary technology, patents and intellectual property rights in return for a license fee. It will also benefit from the German company's professional experience and knowledge of the medium-to-low speed maglev system and receive technical training, the statement added.

It will pay a net initial license fee of EUR30 million (USD38.6 million). When the Chengdu test line reaches a maximum speed of 200 kilometers per hour, an additional EUR4.5 million will be paid in licensing fees. In addition, during the 15-year period of validity of the exclusive contract, an annual license fee based on business development will be separately agreed upon by the two parties.

On the basis of this cooperation, the company will also cooperate with Max Bögl Group to develop a new maglev system, including a light rail transit system with a speed of 120 km/h, a city transportation system with a speed of 160 km/h, a short-distance intercity transportation system with a speed of 200 km/h, and maglev subway system, which will cover about 90 percent of the urban rail transit market, the statement said.

After completion of this deal, the company will fully master the core technology of the world-leading medium-to-low speed maglev system, including maglev vehicles, rails, turnouts and control and maintenance systems, and achieve 100 percent autonomy and localization of parts and components production, the statement added.

Maglev, derived from magnetic levitation, is a system of train transportation that uses two sets of magnets to move the floating train.