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China Daily Website

Railway infrastructure investment decreases

Updated: 2012-07-17 21:23

China's railway infrastructure investment decreased 38.6 percent year-on-year to 148.71 billion yuan ($23.33 billion) in the first half of the year, according to data released by the Ministry of Railways.

Despite being sluggish since June 2011, railway infrastructure investment has been revived at a slow pace from the start of this year, the ministry said.

In June, the ministry's investment on railway construction hit 43.23 billion yuan, a record high in 2012 and 28 percent higher than in the previous month.

However, experts have doubts about the profitability of the newly established high-speed railway projects.

"Some high-speed railway projects have been suffering losses due to high construction costs, the lack of a comprehensive network and insufficient market demand," Zhao Jian, a professor at Beijing Jiaotong University, was quoted by the 21st Century Business Herald as saying.

The resources for the ministry's infrastructure investment plan are mainly from policy banks, including China Development Bank, Zhao said.

"Commercial banks, which doubt the profitability of the new railway projects, have a cautious attitude," Zhao added.

Early this year, the ministry announced its plans to invest 406 billion yuan in railway infrastructure projects, with most funds earmarked to high-speed railway construction. About 122 billion yuan will come from bank loans.

By the end of June, the ministry had accomplished more than one-third of its investment plan.