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Private investment should be encouraged to help fund the massive construction costs of the new intercity railway in the Beijing-Tianjin-Hebei cluster, according to experts.
In December, the Jingjinji Intercity Railway Investment Co was founded by the China Railway Group and the governments of Beijing, Tianjin and Hebei province. The company, which will manage the 23 new lines, was registered with 10 billion yuan ($1.6 billion).
Miao Ziyi, general manager of Jingjinji Intercity, was quoted by Xinhua News Agency as saying private capital should contribute to the projects.
Ji Jialun, a railway expert at Beijing Jiaotong University, said the government should find other stakeholders because intercity railways are much more profitable than ordinary lines and therefore very attractive to private investors.
He said the national railway system has been reformed to raise profitability, but it's difficult to determine the balance sheet of specific networks or lines because China's railways are administered and financed as a single entity.
A new system should be introduced to clarify the income and expenditure of every line and indicate profitability. Private capital is motivated by profit, and investors will only provide money for the new network if they can see a balance sheet showing potential profit and loss, he said.
