The national social security fund is likely to invest in the
Beijing-Shanghai high-speed rail link and other railway
projects.
The fund and the Ministry of Railways are in ongoing
negotiations about the investment, an anonymous source was quoted
as saying in the China Financial News yesterday.
This potential outflow comes at a tense time since similarly
large investments promised by insurers have fallen short of
ministry estimates.
A total of 40 billion yuan (US$5 billion) from insurance
companies has been approved for investment in the project, said
Zhou Yanli, deputy chairman of the China Insurance Regulatory
Commission.
However, this sum is only that expected by the ministry, since
the ministry and the commission agreed two months ago that 80
billion yuan (US$10 billion) needed to be contributed from the
insurance business for the project.
The Beijing-Shanghai high-speed railway project is estimated to
cost at least 130 billion yuan (US$16.25 billion) according to its
initial estimates.
"The initial budget was made according to past experience that
building 1 kilometer of high-speed track usually costs 100 million
yuan (US$12 million)," said Liang Chenggu, news officer with the
Ministry of Railways.
"But the investment may increase along with the growing price of
real estate and resettlement costs," he added.
However, the China Financial News quoted an insider
saying that the Beijing-Shanghai railway will cost at least 170
billion yuan (US$21.25 billion).
Furthermore, if three related projects are included in the final
bill, the total cost could exceed 200 billion yuan (US$25 billion),
the newspaper said.
At present, the National Development and Reform Commission
(NDRC) is studying a feasibility report on the Beijing-Shanghai
railway project, which includes details like the total investment
needed.
The commission approved the ministry's proposal to build the
high-speed railway in March 2006, after more than a decade of
debate on what technology the railway should use.
The 1,320-kilometre line is expected to be completed and go into
operation in 2010 in time for the World Expo in Shanghai.
By then, with a cruising speed of 300 kilometers per hour and a
top speed of 350 kilometers, the railway will slash travel time
between the two cites from 13 hours to under 5.
The ministry said work on the project is expected to start
before the end of the year. Work has already begun on some related
projects, such as new railway hubs and bridges along the route.
Two projects in east China's Jiangsu Province the Nanjing Railway Station
and the Nanjing Dashengguan Rail Bridge both began construction in
September.
Other related projects include the construction of a new Beijing
South Railway Station. The project began last December with an
estimated cost of 6.3 billion yuan (US$789 million).
(China Daily November 8, 2006)