China’s bullet-train network to get Dh1.8 trillion cash boost
China plans to spend 3.5 trillion yuan (Dh1.84tn) to expand its railway system by 2020 as it turns to investments in infrastructure to bolster growth and improve connectivity across the country.
The high-speed rail network will span more than 30,000 kilometres under the proposal, according to details released at a state council information office briefing in Beijing Thursday. The route will cover 80 per cent of major cities in China.
The plan will see high-speed rail lines across the country expand by more than half over a five-year period, a boon to Chinese suppliers of rolling stock such as CRRC and rail construction companies including China Railway Construction and China Railway Group. This year, China turned to a private company for first time to operate an inter-city rail service on the mainland, part of the president Xi Jinping’s push to modernise the nation’s transport network amid slowing growth in the world’s second-largest economy.
China will also add 3,000 kilometres to its urban rail transit system under the plan released Thursday.
At the end of 2015, China had 121,000 kilometres of railway lines, including 19,000 kilometres of high-speed tracks, according to a transport white paper issued Thursday. The United States had 228,218 kilometres of rail lines as of 2014, according to latest available data from the World Bank.
The Chinese government will invite private investment to participate in funding intercity and regional rail lines, said Yang Yudong, administrator of the national railway administration.
Further rail investments will be made in the poorer western cities despite unprofitable operations, Mr Yang said. “We believe these railway lines will break even over time as the flow of people and goods experience fast growth,” he said.
The government plans to “adjust” fares to ensure rail businesses nationwide are viable, the official said, without being more specific.
The rail reforms, including raising ticket prices and allowing private investment, would help to ease some financial burdens of state-run China Railway. The rail operator incurred a loss after tax of 5.57 billion yuan in the first nine months of 2016 and its liabilities totaled 4.29tn yuan as of September 30, according to its third-quarter audited report. The company spent more than 600bn yuan on rail-related infrastructure in the past two years.
Guangshen Railway could see profits rise as much as 68 per cent if average long-distance rail fares climb 30 per cent, said Yang Xin, an analyst at China International Capital. The company is the only one among three listed rail operators in China to focus on passenger transport. It operates railways along the Pearl River Delta region and is co-operator with MTR for the line linking Hong Kong to the mainland.
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Updated: December 29, 2016 04:00 AM