Property slump forces rethink on Guangzhou subway project

A struggling property market has driven Guangzhou city to scale down its subway investments by negotiating to use part of the existing Kowloon-Guangzhou Railway for urban mass transit.

The poor market also has forced the city to postpone leasing land, and to finance the remainder of the 13 billion yuan (about HK$12.11 billion) project through loans.

To have a better use of its limited funds, the city has decided to negotiate with the Ministry of Railways to upgrade a section of the Kowloon-Guangzhou railway which passes through urban areas for mass transit usage.

At the early planning stage of the subway project, the city authorities had thought of building a light rail line to serve the area but later found upgrading that section of railway would be more cost-effective, a city official said.

'Our negotiation [with the railway authorities] has reached a quite mature stage and we hope we can reach agreement by the second half of the year,' said Chen Kaizhi, senior vice-mayor of Guangzhou in charge of the city's infrastructure.

According to the plan, which is not part of the existing subway project, that section of the railway involving four small stations now only for freight loading and emergency use would be upgraded to accommodate future heavy duty usage.

'If we reach agreement, we [the city authorities] will pay for all the necessary improvement works such as telecommunication facilities and station renovation,' Mr Chen said.