Construction of China's first railway to be built with private
investment is scheduled to begin in east China's Zhejiang
Province this year, according to Wang Min, director of the
Ministry of Railways Planning Department. The move is a watershed
in a sector previously monopolized by the government.
The Changshan Cement Co. Ltd., a local, privately owned
corporation, holds a 32.5 percent stake in the Quzhou-Changshan
railway project, according to Sun Qin, director of the project's
planning office.
The other investors are the Ministry of Railways, with 35
percent of the shares, and the Changshan County government, with
32.5 percent.
The railway sector is one of the few industries that remain
government monopolies in China. Construction of the railway network
is primarily funded by the central government, with loans from the
State Development Bank and local governments also contributing.
The shortage of capital for railway construction has created a
bottleneck in the nation's economic growth, with only around 1,000
kilometers of lines built each year. The Ministry of Railways
reports that total annual investment in railway construction is
less than 60 billion yuan (US$7.3 billion).
The Quzhou-Changshan railway project has a budget of 775 million
yuan (US$93.7 million), according to Sun.
"The project to be built is small in size and investment, but it
is considered a pilot project for reforming the highly monopolized
system of financing and investment in the sector," he said.
Fuzhou's Southeast Bulletin quoted Vice Minister of Railways
Wang Zhaocheng as saying that the use of private capital for the
project is expected to "create a good experience."
Some experts are cautiously optimistic about the project's role
in the sector's reform, but say that time will tell whether it can
serve as model for the future.
Railway authorities have been cautiously mapping out a reform
program since the central government proposed it in 2000. Although
the ministry has been trying to improve the efficiency of its
railway network, there have been complaints about apparent
reluctance to break up the monopoly.
Early last month, Minister of Railways Liu Zhijun said, "Market
access will be widened to enterprises to encourage them to invest
their capital into the railway projects."
(China Daily February 23, 2005)