Shenzhen China Technology Industry, a property and infrastructure investor, has become the first private firm to own a railway on the mainland after winning in a bid to buy Luoding railway in Guangdong province.
The company, also known as Shenzhen Zhongji Industrial Development, will pay 48 million yuan in cash and take up the railway's 790 million yuan of debt, according to the website of Guangzhou Enterprises Mergers and Acquisitions Services.
Shenzhen China Technology would also be required to co-operate with local governments to build the Luocen railway connecting Luoding to Cenxi in Guangxi province in three years, the announcement said.
The 62.2km railway, a municipally owned coal carrier that runs services between Chunwan and Luoding, has been losing money for more than 10 years. Its transport volume, mainly dry goods, is far less than the capacity of 5.5 million tonnes.
The Luoding government planned the Cenxi extension to increase volumes but could not afford the expected cost of 14.7 billion yuan, so it put the railway up for sale to raise funds.
Building is scheduled to begin at the end of the year and be completed by 2008.