China will this month launch what it is touting as the world's longest high-speed railway built in one go to link the country's two most important cities, officials said on Monday, shrugging off concerns over financing and high debt levels. Costing 220.9 billion yuan ($34.1 billion), the 1,318-km (820-mile) Beijing-to-Shanghai line's formal start marks the beginning of a massive effort to transform its sprawling rail network.
The spending spree will amount to 2.8 trillion yuan ($431.7 billion) between 2011 and 2015. The new line will whisk passengers through the Chinese countryside at 300 kph (188 mph), cutting travel time between the two cities nearly in half to less than five hours.
In doing so, it will provide a model for how the government is seeking to efficiently transform passenger transport in a nation already accustomed to travelling by rail rather than by aircraft. Railway Ministry officials told a news conference that the line, using "world-class technology standards", was only the beginning of an investment splurge that could be an example to the world.
Over the next five years "railway investment will continue the trend of rapid growth. We will not slow down the pace, and there will be no cut in investments", Vice Minister of Railways Hu Yadong said. The 2.8 trillion yuan earmarked is an increase of 41.4 percent over the country's previous five-year spending plan which finished in 2010. In 2010 alone, China's railway investments amounted to 707.5 billion yuan, up 17.8 percent from 2009.
That funding will help China meet its goal of laying 45,000 km of high-speed track across the country by 2015. But the steep price tags for schemes like the Beijing-Shanghai link carry their own financing woes, concerns the ministry has played down. China's Railway Ministry is already heavily in debt. Its total liabilities jumped to 1.9836 trillion yuan at the end of March 2011, representing a 58.24 percent asset-liability ratio.
Former Railway Minister Liu Zhijun spearheaded the sector's investment drive over the last decade, but his dismissal earlier in the year on "disciplinary violations" - a charge that usually denotes corruption - called into question the ambitious expansion plans. The ministry posted a rare pre-tax loss of 3.7 billion yuan in the first quarter of 2011, according to figures released by its finance department. Yu Bangli, the ministry's chief economist, said that with rail seen as a vital part of national infrastructure, the ministry had sufficient support from other departments to finance its massive construction projects. "Everyone can relax, funds for railway (construction) are guaranteed," he said. Yu has previously told Chinese state media that he expects most high-speed lines to be profitable within four to seven years after construction.
Comments
Comments are closed for this article.