Mounting criticism and debt are forcing the Ministry of Railways, the monopoly rail operator, to expand its assets at a less aggressive pace and to show more willingness to work with private investors, according to mainland press reports.
As the death toll from last Saturday's high-speed rail crash in Wenzhou increased to 40 yesterday, the 21st Century Economic Herald reported that the ministry was abandoning its long-standing policy of seeking as much equity share as possible in every rail development project on the mainland.
People.com.cn, the website of the official People's Daily, quoted Zhao Jian, a professor with Beijing Jiaotong University's School of Management, as saying that the ministry may even face a financial crisis after the crash.
The ministry used to demand that all local governments sell the ministry at least 50 per cent stakes in their local rail projects, including subways. But that policy has gradually started to change in recent months, as some projects didn't turn out to be as profitable as hoped.
For example, the ministry recently said it would complete three projects it started between 2008 and 2009 as part of a large inter-city rail system in the Pearl River Delta in Guangdong, but after those three it won't demand to be the majority shareholder in the remaining 20. The 23 projects will cost an estimated 370 billion yuan (HK$448 billion).
In another development, the ministry transferred its majority equity ownership in the Chengdu subway system to other investors, according to the 21st Century Economic Herald.