Social security fund to be invested in railways

By Xin Dingding (China Daily)
Updated: 2006-11-08 06:49

 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 currently in negotiations about the investment, an anonymous source was quoted as saying in the China Financial News yesterday.

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The potential investment by the fund follows the huge investments promised by insurers falling 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 China Insurance Regulatory Commission.

But the amount is only half what the ministry expected, since the ministry and the commission agreed two months ago that it needed 80 billion yuan (US$10 billion) 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 the initial plan.

"The initial budget was made according to past experience that building 1 kilometre 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 said.

The China Financial News quoted an insider saying that the Beijing-Shanghai railway will cost at least 170 billion yuan (US$21.25 billion).

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, when Shanghai hosts the World Expo.

By then, with a designed speed of 300 kilometres per hour and a maximum speed of 350 kilometres, the railway will shorten travel time between the two cites from 13 hours to less than 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 building a new Beijing South Railway Station. The project began last December with an estimated cost of 6.3 billion yuan (US$789 million).

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