China

China cuts spending on railway construction in 2012

English.news.cn   2011-12-23 18:20:14            

BEIJING, Dec. 23 (Xinhua) -- China is planning to invest 400 billion yuan (629.9 billion U.S. dollars) in railway infrastructure construction next year, railway minister Sheng Guangzu said here Friday.

The investment scale registered a slight decline from the total expenditure of 469 billion yuan this year and a marked decrease from over 700 billion yuan in 2010.

This is the first time for the government to announce a clear goal for future railway development. Railway construction has been almost halted as the government has decided to slow the development of high-speed rail lines after a fatal high-speed train crash that killed 40 people in east China in July.

Total fixed asset investment on railways will reach 500 billion yuan next year, while construction on 6,366 kilometers of new railways is scheduled to be finished, said Sheng at a national conference on railway construction. P But Sheng stressed that rapid railway development should be maintained, as it plays an important role in the country's social and economic development, especially in boosting domestic demand.

Sheng said earlier this year that China is planning to expand its railway network to 120,000 kilometers by the end of 2015.

China's railway projects have been on a binge since the country rolled out a stimulus plan worth four trillion yuan to counter the financial crisis of 2008, which was mostly spent on infrastructure construction.

But the sector has been hit hard in the second half of 2011, after the government tightened liquidity control, and the deadly train collision eroded investor confidence and limited the ministry's ability to borrow money or sell bonds.

In 2011, the country had finished the construction of only 2,022 kilometers of new railways, while track-laying of 3,176 kilometers of new railways has been completed, according to Sheng.

Analysts said the scaleback of rail construction suggests the government is trying to cool down the country's rapid railway expansion to a normal level after the previous construction boom.

Sheng said railroad construction should be promoted "scientifically and orderly" next year, which is a severe challenge, and that there is still much to be done to collect sufficient funds for railway projects.

Next year's construction will focus on major rail lines and those closely linked with coal transportation and economic development, while ensuring the progress of projects that have already started construction, he said.

Sheng admitted that it would be an arduous task to ensure quality and safety of railway projects amid massive ongoing construction.

Project schedules should be set at a reasonable range, and time limits of projects should not be changed randomly, he said.

Sheng also called for more transparency and standardized operation in railway project bidding.

The ministry will increase efforts to raise money and enhance management over its funding, and find more channels to finance the ongoing construction, he added.

To solve cash restraints, the ministry secured more than 200 billion yuan in financial support from banks to boost investor confidence in November. It also resorted to issuing bonds to finance its construction projects.

"The ministry will actively seek investment from local governments and the private sector," Sheng said.

At the end of September, the ministry's outstanding debt increased to 2.23 trillion yuan with its asset-liability ratio standing at 59.6 percent, official data showed.

Sheng also pledged to improve railway services and crack down on corruption in the railway system.

Liu Zhijun, the country's former railway minister, was removed from office over an alleged "severe violation of discipline" in February, followed by MOR deputy chief engineer Zhang Shuguang's fall in March.

China's railway authorities will introduce a real-name ticket purchasing system in some of the country's busiest stations from January 2012, which comes ahead of the Chinese New Year travel rush, in an attempt to crack down on rampant scalping.

China's railway system is expected to carry 2.02 billion passengers and 4.16 billion tonnes of goods in 2012, up 9.1 percent and 6.4 percent year- -on-year, respectively, according to Sheng. 

Editor: Deng Shasha
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