China's fixed asset investment in railways up 25.7%

BEIJING -- Fixed asset investment in China's railways rose 25.7 percent year on year to 37.63 billion yuan (about $6 billion) in the first two months of the year, according to the railways authority.

The growth marked a substantial dip from the 70.9-percent rise seen in January.

During the January-February period, railways infrastructure investment rose 20.9 percent to 25.14 billion yuan, slowing from the 62.3-percent growth in the first month of the year, a Ministry of Railways (MOR) statement said.

In 2013, China plans 650 billion yuan of fixed asset investment for the sector.

On Thursday, China's National People's Congress, the Chinese parliament, adopted a cabinet reshuffle plan, which included the dismantling of the MOR into administrative and commercial arms in a bid to reduce bureaucracy.

After the restructuring, the proposed State Railways Administration will be supervised by the Ministry of Transport and perform the administrative functions of the defunct MOR. The planned China railway corporation will run commercial businesses which are currently controlled by the MOR.

While the move is widely applauded by the public, the ministry's massive debts incurred amid the country's construction boom in recent years have stirred market concerns.

According to official data, the ministry's debt-to-asset ratio climbed to 61.81 percent at the end of September 2012. Its total assets were 4.3 trillion yuan ($685.3 billion) and its debts amounted to 2.66 trillion yuan at that time.

In response to public doubts, Railways Minister Sheng Guangzu promised to properly solve the debts owed by the MOR, for business purposes and for public welfare as well, while hoping private capital and foreign funds could actively participate in the projects of the new company.

According to the MOR, China had 98,000 km of rail lines, including 9,356 km of high-speed rail lines, in operation at the end of 2012.