Ministry to be 'more flexible' on rail plans
Financial difficulties have forced the Ministry of Railways to loosen its grip on the development of local high-speed rail networks, according to an industry expert close to top decision makers.
Wang Mengshu, deputy chief engineer of China Railway Tunnel Group, said yesterday that many provinces, particularly those in coastal areas, had long proposed building their own intercity passenger railways, which would run within their own provinces at speeds of 250km/h. But none have begun construction as yet.
Detailed blueprints from provinces such as Guangdong and Zhejiang were submitted to the ministry and the National Development and Reform Commission (NDRC) for approval, he said.
In the past, the ministry insisted on investing directly in such projects and controlling their operations as a major shareholder, Wang said. 'They have become more flexible because of tightening financial difficulties.'
The rapid expansion of high-speed railway lines on the mainland since the financial crisis in 2008 led to the ministry carrying 2.3 trillion yuan (HK$2.82 trillion) in bank loans on its books last year, according to National Audit Office. The ministry has been forced to pull its dwindling financial resources together to keep some important national projects going.
Wang said the mainland's high-speed rail planners categorise the network into three levels. Lines connecting Beijing to other provinces are under the first - and most important - level, the second level connects provincial capitals and the third connects cities within a province.
Wang said the ministry would maintain tight control over the first and second levels and grant freedom under the third.
The ministry would, for example, invest in and control the high-speed railway line between the cities of Zhengzhou in the north and Chongqing in the southwest. But intercity networks in Guangdong and Zhejiang would be handed down to the provincial governments.
'Guangdong has completed and submitted their plans and will likely become one of the first to launch construction,' Wang said. 'Private investors will be invited to become dominant shareholders.
'Though the ministry will likely withhold its final say on prices, the railways will be run mostly according to the market mechanism.'
Early this year, Guangdong approved a proposal to attract investors by giving them land for real estate development in return for their investment in building the railway lines.
Dr Zhang Guoqiang, a researcher from an NDRC transport research institute, said the commission was likely to support the move, but some studies would have to be conducted before the construction of provincial lines would be approved.
'It is good to see the ministry changing [its] attitude,' he said.
But Zhang said the ministry had neither the capability nor the need to maintain its grip on provincial networks.
The biggest challenge to provincial governments was to find an effective way to attract investors and guarantee their profits while maintaining public service on the railways.
For example, he said, the commission had yet to issue guidelines for pricing tickets.
'We have learned enough costly lessons from the massive build-up campaigns in the past few years,' Zhang said. 'We should have some patience this time.'
