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BIZCHINA> Top Biz News
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Railways holding firm, float mulled
By Mao Lijun and Zheng Lifei (China Daily)
Updated: 2009-06-25 07:51 "Such a move is designed to make it more attractive to potential investors," the two sources said. The Beijing-Shanghai railway, linking the two wealthiest cities in the country, is the most valuable rail asset the ministry has. The railway, the busiest line in China, accounts for about 10 percent of the nation's total rail passenger transport volume. The under-construction high-speed Beijing-Shanghai rail link is expected to double the transportation capacity the current regular line carries, to 80 million passengers each year, while shortening travel time to about five hours, with a peak speed of 350 km, according to the project plan. The asset restructuring and capital-raising plan, the people said, was still at a very early stage and the authority has not yet set any timetable for the massive scheme.
The move, analysts and experts said, could be a major breakthrough and could help alleviate the capital shortage the country faces in its frantic push to expand its rail networks to cope with rising demand. "It is a major step forward in the reform of China's rail system but it will certainly take some time for the plan to materialize," said Li Chao, a rail analyst with China Jianyin Investment Securities Co. "But it is hard to predict how much capital it can raise from such a plan because the details are too sketchy," the analyst said. The central and local governments are the only financiers of railway projects and the tools they can use to pool capital are debt-financing instruments, such as bond issuance and bank loans. The government said earlier that it plans to add 41,000 km of rail lines to its existing network by 2020 at a cost of $731 billion. (For more biz stories, please visit Industries)
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