Opinion | China rides slow train to reform as private investors shun railway
Corruption, bureaucracy and a lack of transparency are hindering government plans to reform the mainland's railway industry and attract private investments
The central government is working to reform the nation's rail industry and encourage more private investment in the sector, but analysts warn it's going to be a long and arduous task.
"I think the government wants to reform the Railways Ministry slowly. There are many things that hinder reforms," said Guotai Junan Securities analyst Gary Wong.
Increasing private investment in the nation's railway will not be easy, said Zheng Tianxiang, a transport professor at Sun Yat-sen University in Guangzhou.
Many changes are needed to make rail projects attractive for private investment, said Jefferies analyst Julian Bu. "The government needs to reform the ministry but reforms won't be easy," he said, adding that the Railways Ministry is the most backward and one of the most corrupt in China.
The mainland's railway is dominated by the ministry, which acts like a fiefdom with two million employees. About 90 per cent of the rail projects are funded by the ministry, and the rest by the private sector and local governments, estimates Wong.
"The Railways Ministry has too many people and too many divisions. It is even into businesses such as hotels. If there is reform, these will be separated from the ministry."
