RMB500 Billion Investment Converges, 15 Cities Compete for Rail Transit Projects

DATE:2008-02-18 AUTHOR: SOURCE:First Financial Daily

China plans to build as long as 1700 kilometers of fast transit railways in big cities from 2010 to 2015 with a total investment of over RMB500 billion, among which over RMB50 billion will be invested both in Beijing and Guangzhou respectively and the investment in Shanghai alone will exceed RMB140 billion.

Qin Guodong, Senior Engineer and Vice Director of Subway and Light Rail Research Center of Ministry of Construction, revealed the above news at the China RailWorld Summit 2006, which opened in Beijing yesterday. Qin indicated that funds for city rail transit construction projects would still mainly come from government investment and bank loans with government guarantees.

The investment demand for the coming 15 years will be over 600 billion yuan. As the external benefits of city rail transit projects can’t be directly reflected in the enterprises’ own interests, city government is obliged to bear responsibilities to compensate for the deficit and for the repayment of the bank debts, Qin Guodong pointed out clearly.

The key to the construction of city rail transit projects is the financial capacity of the government, Qin commented, in the execution of the projects, the government should take practicable measures to guarantee project financing and the capacity for repayment of loans, and on the other hand ensure that banking institutions shall provides loans rationally and objectively according to the repayment capacity of the government.

The construction and development of passenger railway lines and city rail transit systems calls for the support and investment from various parties in China and abroad.” Chen Zhongshi, Vice Director of Development Planning Bureau of the Ministry of Railways, made the appeal at the summit meeting for financing for the construction of railways, which is presently far from sufficient.

China plans to build about 500-600 kilometers of city rail transit lines with a total investment of 170 billion yuan in the coming five years.

The total investment in the 15 cities for the short-term from 2010 to 2015 will be as much as over RMB500 Billion”, said Mr. Qin, “In spite of the priority presently given to key traffic lines (subways) for megalopolitan or metropolitan cities, future projects will gradually extend to secondary lines or linkage lines in these super-large cities and to the key lines in the sub-metropolitan cities.”

A Construction Market of RMB600 Billion Yuan

15 Cities Ready to Compete

By September 2006, ten cities in mainland China have had their city rail transit systems in operation, with a total length of about 500 kilometers, among which Shanghai comes in the first place with a rail transit of 123 kilometers.

According to Mr. Qin Guodong, with the rapid economic growth and the development of urbanization, the passenger flow in cities increases considerably, and the normal public transport means can no longer meet the need of city development, thus the advantage of rail transit becomes more and more prominent in transport efficiency. Besides, the significance of city rail transit construction lies not only in the relief of the crowded traffic in the center districts of the city, but also in its important function to guide the reasonable development of the space structure of the city.

For these reasons, dozens of cities have prepared to apply for the construction of city rail transit projects. At present, 15 cities have submitted their plans for city rail transit construction, which are Beijing, Shanghai, Tianjin, Chongqing, Ha’erbin, Changchun, Shenyang, Wuhan, Nanjing, Guangzhou, Shenzhen, Hangzhou, Suzhou, Chengdu and Xi’an. Some other cities including Ningbo, Zhenzhou, Dongguan and Changsha, etc., are busy with preparation and planning.

In addition to city rail transit, the development of inter-city rail transit has als