CHENGDU'S move to shelve indefinitely plans to build the largest subway system in southwest China is not surprising. While the Sichuan provincial capital has yet to take action on its several billion dollar plan, cities such as Shanghai, which saw the full operation of its Line One system in April, grapple with daily operational finance problems. A subway system solves a great deal of the traffic congestion problem plaguing many cities. Subways are seen as a symbol of modernism. More importantly, the need for them is pressing - existing roads, built to cope with the traffic situation 20 years ago, are overtaxed, and there is a lack of ground level space for more. As one Shanghai official put it: 'It's either underground or above the ground.' The difficulty Chengdu encountered in getting funds is not a unique problem. With most cash-strapped cities needing to upgrade outdated infrastructure, costly subway plans are often not the first priority. One alternative is to look for foreign funding, but this is not always easy. 'We would like to seek foreign investments for the subway project but investors are very concerned about the returns on investments,' said Liu Yucheng, vice-director of the Chengdu Construction Management Committee. First line cities such as Beijing and Shanghai, where there is the political will, could be in a better position. Shanghai's 16-kilometre Line One cost 1.12 billion yuan (about HK$1.04 billion) to build, and 40 per cent came from soft loans from Germany, France and the United States. Although the Shanghai Metro Corp estimates that it will be two more years before the daily financing of Line One's operations ceases to be a problem, it is now working on constructing the 13.6 km first phase of Line Two from Jingan district in the Puxi business area to Longdong Road in Pudong. The cost of the first phase, due to be completed in four years, is US$1.2 billion. Half the money will come from foreign government loans. Likewise, Guangzhou, in Guangdong province, has the same problems - acute traffic congestion and the lack of funds. Early this month, senior Guangzhou officials announced that cost over-runs had prompted the State Planning Commission to review the construction of the subway. Projected costs of the project had risen to 12.75 billion yuan, more than double earlier estimates. But Guangzhou Metro's general manager, Chen Qingquan, said 'funding so far is going well'. The 18.2 km, 16-station Line One to run from Guangzhou East rail station to Fangcun district is scheduled for completion in 1998 and is to be fully operational in the third quarter of 1999. More than 60 per cent of the development money will be raised from overseas loans and the sale of land along the route. The remainder will come from rent on plots above the line and from government funds. Beijing was the first city in the country to have an underground system, with the first line opening in 1969. Extensions are also being made to the existing line, but planning is inhibited to a large extent by the need to preserve the facade of the historic old city. Although overcrowding is the norm on the Beijing subway, it is losing money and needs an annual subsidy of 200 million yuan from the city government. There is an ambitious plan for expansion to build 11 lines with a total length of 258 km, of which 78 km will be built by 2010. Financing at 400 million yuan per kilometre will come from the central government, bonds, foreign government loans and foreign investments. In Tianjin, plans have been drawn up to extend the existing line from seven to 18 km. Over the next five years, the city hopes to renovate its existing line and build eight more stations which will cost 4.16 billion yuan. But the bigger plan is the new underground system comprising five subway lines and a line to its port and special development area. Tianjin officials agreed that the costs would be huge but said they had no choice if the city was to continue to function and grow. Exactly the sentiments of leaders in Chengdu. Although it has a population of 9.6 million is the capital of Sichuan, which has 110 million people, Chengdu has been left to seek funding for a subway system by itself. This more or less summarises the situation of subway systems on the mainland - fragmented and without a comprehensive overall plan for the country. In Chengdu, traffic congestion is fast becoming more acute as the central government develops the central and western regions of the country. The city had planned for an L-shaped 13 km Metro Line consisting of 13 stations. It will cost between 600 million and 700 million yuan to build one kilometre of the subway. But Mr Liu said the tightening of credit by Beijing meant it was now more difficult than ever to realise the plan. Instead of the subway, they have proposed to develop a light rail system which would cost one fifth of the amount needed to build the subway.