Business
June 23, 2005
China opens railway equity to foreign investors
The Wuhan-Guangzhou high-speed railway scheduled to start construction on June 23 will select from domestic and overseas investors to raise 24 billion yuan.
The trunk line financing is open to various kinds of capital including overseas capitals, which is the first time in China's railway infrastructure construction and operation.
The Wuhan-Guangzhou high-speed railway is the longest passenger transportation line with the largest investment started in China this year. It is 989 kilometers long costing about 116.6 billion yuan and is scheduled to finish and open to trains by the end of 2010.
The Ministry of Railways has authorized China Railway Construction Investment Corporation as investor representative and controlling shareholder. The Ministry of Railways contributes 51 percent while Guangdong, Hunan and Hubei become shareholders based on the costs of land used by the Wuhan-Guangzhou passenger line. The rest will be raised from domestic and overseas investors.
As a raft of high-speed railway projects are planned and started their large-scale equipment procurement and technology introduction have caught the attention of Japan, France and Germany which own high-speed railway technologies.
At the beginning of this month the Ministry of Railways and the German Transportation and Housing Ministry signed an agreement, according to which China and Germany would enhance cooperation in heavy-duty locomotive design and manufacture, design and construction of lines, tractive power supply and communication signals, design and construction of passenger lines. France, which owns the world's first high-speed railway network, also expressed hope to jointly develop new generation high-speed trains with China.
According to experts to realize the Mid & Long-term Railway Network Plan China needs to put 2 trillion yuan into the construction of railways in the next 15 years. In another word about 130 billion yuan will be needed each year. Currently investment in railway construction is only 50 billion yuan each year. The huge investment gap will provide social capitals with huge investment opportunities.
By People's Daily Online
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