There is 200 billion yuan (HK$244 billion) in new funding in the pipeline for the indebted Ministry of Railways, but industry experts say the agency is still a long way from overcoming its financial shortfall that has resulted in major delays in rail projects.
Experts warn that idling factories and unpaid workers involved in railway projects could engender social instability if the funding problem lingers, but they also believe that Beijing will eventually sort out the ministry's financial woes.
The ministry will get the 200 billion yuan as emergency aid from Beijing via China Development Bank and the Ministry of Finance in the form of loans and bonds, according to a Xinhua report last week.
However, professor Wang Mengshu, deputy chief engineer of the China Railway Tunnel Group and a key drafter of the mainland's high-speed-rail development plan, told the South China Morning Post yesterday that construction of more than 10,000 kilometres of railways, mostly high-speed lines, had been postponed because of funding problems.
He said it would take much more than 200 billion yuan for rail authorities to fully pay off contractors' debts and continue construction of key rail projects.
'To carry out the national railway-development plan, the ministry needs an average of 800 billion yuan every year for the next five years to keep things moving on schedule,' Wang said.
'If factories and workers remain unpaid, they will become the seeds of social instability and even a political issue.'