Government and Policy

Funding for high-speed railway network adequate: official

(Xinhua)
Updated: 2010-03-13 21:02

BEIJING - An official with the Ministry of Railways (MOR) said on Saturday that China has sufficient money to finance the high-speed railway construction boom on the back of multiple sources of funding.

Yu Bangli, chief economist with MOR, said the debt level of China's high-speed railway construction is safe and reasonable, and a fiscal crisis is not likely to happen.

The debt-to-asset ration of the high-speed railway projects is 52 percent in 2009, much lower than that in other countries, Yu said.

To stem fiscal risks, the ministry ordered the capital base of a high-speed railway project be no less than 50 percent of the total investment.

Yu noted the central and local governments attach great importance on high-speed railway construction and increase financial input every year.

A large sum of social capital is invited to finance the construction, he said. A wide range financial tools such as securities and bonds are also important channels to raise funds.

China currently has about 3,300 kilometers of operational high-speed railways, on which bullet trains gallop at an average speed of 350 kmph, and it plans to expand the network to 13,000 kilometers by 2012, according to the Ministry of Railways.

As part of the 4 trillion-yuan ($585.7 billion) economic stimulus package, China invested about 600 billion yuan (about $88 billion) in railway construction last year, an upsurge of 80 percent.

The government has earmarked a record 823.5 billion yuan ($120.7 billion) for 2010 to further expand its railway network.