Cash woes hit Tianjin metro

PUBLISHED : Wednesday, 28 February, 1996, 12:00am
UPDATED : Wednesday, 28 February, 1996, 12:00am

SUSPENSION of a proposed four billion yuan (about HK$3.72 billion) extension of the metro line in Tianjin, near Beijing, is another sign that China's plans to develop urban underground rail networks are stalling.

The delay in the development is believed to have been caused by government macro-economic controls aimed at cooling the overheated economy.

Xian Yanming, deputy director of the Tianjin Municipal Engineering Bureau's foreign economy and affairs department, said the central government had ordered a postponement of the development plan approved by the State Planning Commission about three years ago.

He said the government had not elaborated on reasons for the suspension, but he suspected that the move was in response to the austerity measures.

Work on the development was being held up pending a review by the central government, he said.

Suspension of the project is also believed to have been caused by the city's difficulty in getting capital.

Plans to sell real estate development rights along the route, which would have helped to raise money, have fallen flat.

The extension is one of Tianjin's largest public works developments aimed at improving the transport network.

The plan is to extend the 7.4-kilometre subway, which was opened in 1984 after 14 years of construction.

The underground railway, running north to south from the west Tianjin railway station to Xinhua Road in the city centre, is to be extended 10.08 km east to the Huidui area.

Investment in the extension is estimated at four billion yuan, of which about one billion yuan was to be financed by a loan from the Australian government.

The balance was to be funded by sales of land-use rights of commercial sites in the city centre.

Mr Xian has said the Tianjin government was facing problems in raising money from sales of the land-use rights of a commercial zone in the city centre, known as the Friendship Road Commercial Area.

It had been hoped that the commercial area, covering about 2.2 million sq ft, would raise about two billion yuan for the railway project.

Work on the extension was scheduled to start this year, and the route was intended to be operational by 1998, but work on the project has not started, because of the funding shortage.

The difficulty Tianjin faces in building its railway system is not unique. The government of Chengdu, in Sichuan province, also had to shelve indefinitely plans to build a subway system that would be the largest underground railway in southwest China, due to a shortage of funds.

The city had planned a 13 km metro line, with 13 stations and costing between 600 million yuan and 700 million yuan per kilometre.

But the tightening of credit by Beijing led to difficulties for the Chengdu government in realising its plan.

Late last year, Guangzhou officials said cost over-runs had prompted the State Planning Commission to review the construction of the first phase of that city's underground railway.

Reports said the 12.7 billion yuan project was facing financing setbacks, but this was denied by mayor Li Ziliu earlier this month.

Mr Li said the city had ample funds to finish the project on schedule by 1998.

Problems with inner city railways CHENGDU: proposed development of 13-km Metro Line consisting of 13 stations suspended by city government at end of 1995.

GUANGZHOU: serious cost overrun for the 12.7 billion yuan Guangzhou Metro Phase One. Reports it faces financing setbacks have been denied by mayor Li Ziliu.

TIANJIN: central government ordered to hold up development of a four billion yuan underground railway system.

WUHAN: the city government is awaiting approval from the State Planning Commission for a multi-billion yuan light-railway project.