NPC: Private investors encouraged to invest in China’s railways

March 10, 2008 Posted by China Briefing Reading Time: 2 minutes

BEIJING, Mar. 10 – As we alluded to February 26, the Minister of Railways Liu Zhijun has encouraged overseas and domestic private investors to invest in China’s rail infrastructure as country steps up construction of its railway network.

“We welcome overseas and domestic private investors to get part ownership of the railway lines, except the trunk rails,” Liu said on the sidelines of the annual National People’s Congress (NPC) session.

This is a major step in investment reform and will get the government “ample capital” to realize its plan to expand the railway network from the present 70,000 km to 120,000 km by 2012 Liu said.

Potential investors remain wearing of investing in China’s railways, due mostly to the government’s control of the transport pricing regime.

Overseas and domestic investment in the railways from 2003 to last year was RMB10 billion, Liu said. But that represents less than 2 percent of the total investment of RMB522 billion for the past five years.

“Future investment opportunities will increase because we are going to raise some incentives to change the situation,” Liu said without giving details of the pricing reform.

The government will spend up to RMB300 billion to build 7,820 km of track this year, when separate power generating units will be set up at more than 2,000 railway stations.

China’s railways experienced mass chaos and disorder last month when heavy snow and sleet stranded millions of passengers desperate to return home for Chinese New Year. Five years from now, passengers won’t have to suffer the same predicament in such a situation, Liu said.

“The heavy snow showed the railways are behind the country’s economic and social development,” he said. “It reminded us that we have to try every possible means to increase our railway transportation capability.”