The Guangdong Luoding Railway Corporation (GLRC) has decided to
put the Luoding railway line, which runs from Luoding to Maoming,
up for auction as a result of continual financial losses in recent
years. Auction monies will be used to finance the construction of
the Luoding-Cenxi service that will operate from Luoding in
Guangdong Province to Cenxi in
Guangxi Zhuang Autonomous Region.
According to GLRC, the new Luoding-Cenxi project would cost an
estimated 1.469 billion yuan (US$184 million). However, funds for
the part of the railway within Luoding City limits, which is 33
kilometers long, should be raised by the city itself. Neither the
railway company nor the Luoding local government can afford it.
The existing Luoding railway line has been running at a deficit
for many years, which is why local banks have refused to grant GLRC
a new loan.
There are only a few railway lines running within Guangdong,
including the Guangzhou-Meizhou-Shantou line, Sanshui-Maoming line
and Zhanjiang-Hai’an line. The line from Luoding to Maoming, owned
by Luoding Railway Corporation, began operations at the end of 1999
and was the first county-level railway line in China at the
time.
When the line was built, it was expected to reap good economic
benefits, which, it was hoped, could be used to finance the
construction of the Luoding-Cenxi line. However, it was only able
to raise 15 million yuan a year, at best; hardly enough to repay
debts of between 700 and 800 million yuan.
This is the first time that a state-owned railway company has
had to auction off one of its properties. Up for sale are 100
percent of all rights in the line, including managerial and
administrative rights.
The announcement, which was made on July 14, did not specify if
the auction would be open to only state-run or private bidders.
GLRC explained that bidders must satisfy two requirements:
First, they must be able to take on all the debts of Luoding
Railway; and second, they must be agree to be involved in the
construction of the Luoding-Cenxi Railway, which means that the
eventual buyer must have at least 1 billion yuan in available
funds.
Approved by the National Development and Reform Commission
(NDRC) last year, the Luoding-Cenxi Railway project is one of the
key programs agreed to by Guangdong and Guangxi as part of Economic
Cooperation in the Pan-Pearl River Delta Region. Scheduled to be
operational by 2008, it will be the most convenient railway channel
connecting Guangdong and Guangxi.
According to the project plan, the Luoding-Cenxi line will start
in the east from Luoding on the Chunwan-Luoding route in Guangdong
and ends in the west at Cenxi Station on the Luoyang-Zhanjiang
line, which is currently under construction. It will service
provinces and cities in the southwest and the northern parts of
China, measuring a total service length of 75.71 kilometers.
(China.org.cn by Xu Lin, July 23, 2006)