Fears raised over huge debts involved in Beijing's infrastructure plans
With 1 trillion yuan to be spent on road, rail, port and airport projects in 2013, one analyst says massive debts required are unsustainable
As Beijing targets 1.05 trillion yuan (HK$1.3 trillion) to be spent on roads, rail, ports and airports this year, concerns have been raised over the huge debt involved.
The Ministry of Transport announced on its website yesterday that 397.4 billion yuan would be spent on roads, airports and ports this year, 0.1 per cent more than in 2012. The Ministry of Railways, in a bond prospectus, earmarked 650 billion yuan of capital expenditure on railways this year, 3 per cent up on last year.
"In 2013, our nation will accelerate the construction of comprehensive transport systems," the transport ministry said.
Construction would begin this year on 80,000 kilometres of roads, 10 airports and 100 port berths with a capacity of at least 10,000 deadweight tonnes each, the transport ministry announced, while 5,200km of railway would start operation.
Five major rail projects would be undertaken this year, including the high-speed railway between Kunming, the capital of Yunnan province, and Changsha, the capital of Hunan province, which would be completed in 2015 and incur a total investment of 160 billion yuan, the railways ministry's bond prospectus said.
The railways ministry's debt doubled from 1.3 trillion yuan at the end of 2009 to 2.66 trillion yuan in September last year, while its gearing ratio rose from 53.1 per cent to 61.8 per cent, according to the prospectus. The railways ministry suffered a loss of 8.54 billion yuan in the first nine months of last year, against a profit of 31 million yuan in 2011.