New rules bring foreign cash on track By Xie Chuanjiao (China Daily) Updated: 2005-06-13 05:50
Railway projects in Shandong Province could be funded solely by
foreign capital under new rules that have lifted restrictions on who can invest.
The province is the first in China to allow foreign investment to enter
railway construction and to allow local rail property rights to be transferred
to foreign companies.
The official website of the Shandong State Assets Regulatory and Management
Committee announced the news at the weekend. The committee has put forward six
local rail lines for foreign investors. Three of the projects can be solely
funded by foreign money, and two others are preparing to shift property rights.
The six projects include the Linqu-Yishui Line, which needs US$148 million,
the Dalailong Line, which needs US$151 million, and the Longkou-Yantai Line,
which should have a total input of US$145 million.
The lines run past natural resources, large coal mines and petroleum
companies.
The transport capacity of the Pingshang-Lanshan Line is expected to reach 10
million tons next year and 40 million in five years' time. In six years,
investors are expected to earn their money back and start making a profit.
Shandong needs to increase railway construction in the province to meet the
needs of a fast-growing economy, said Li Chang'en, vice-director of the Shandong
Railway Bureau.
As the country's second-largest economy at provincial level, Shandong demands
of all kinds of resources, and a shortage of transport has become a major
headache.
Li said Shandong signed a deal with the Ministry of Railways in April to
conduct a joint massive railway building programme, aiming to build more than
2,600 kilometres of track by 2010. Total investment is estimated to reach 70
billion yuan (US$8.46 billion).
"International co-operation will improve the level of construction, equipment
and management of the sector," said Li. "There are no policy obstacles for
foreign investors to enter the sector. Local railways are different from
national railways in that they enjoy a lot of freedom."
The website also said that two companies from Australia and the United States
have shown a lot of interest in the Linqu-Yishui Line. More details should be
available by the middle of June.
Railway construction in China still relies heavily on State investment. Only
a very small amount of non-State capital has been injected into the sector in
recent years less than 1 per cent of the total.
(China Daily 06/13/2005 page3)
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