Beijing-Shanghai high-speed line turns profitable in 2014

A surge in passenger traffic drove the high-speed rail route from Beijing to Shanghai into the black for the first time in 2014, its third year of operation, the official Xinhua News Agency reported on Monday.

"High-speed rail is good for the nation and can offer convenience to the public, but it is not a profitable business," Cai Qinghua, former chairman of the Beijing-Shanghai High-speed Railway Corp, told the agency.

But the Beijing-Shanghai route shattered that rule, proving that high-speed services are not just a way to waste money, experts said.

Ticket sales last year stood at 30 billion yuan ($4.8 billion), with an estimated net profit of 1.2 billion yuan. The line carried more than 100 million passengers between the capital and the coastal commercial center, up 27 percent from a year earlier.

In 2012, ticket sales totaled 17.4 billion yuan and the line posted a loss of 3.7 billion yuan.

Cai, who was also the former vice-minister of the railways, said on Monday that the project was forecast to break even after five years of operation, but it reached that target in advance.

"We could not operate at capacity in the beginning," he said. "We need to manage a healthy passenger rail system and gradually meet the transportation demand."

The ministry was replaced by the China Railway Corp in 2013.

Experts have said high-speed trains are always the preferred option for passengers in China. These trains overcome the disadvantages of buses, which have a bad safety record (especially for the overnight services) and they are more convenient than planes.

"We will build a second Beijing-Shanghai High-speed Railway, if things go on like this," said Cai.

Luo Renjian, a researcher at the Comprehensive Transport Institute of the top planning agency, the National Development and Reform Commission, said that the Beijing-Shanghai bullet line is a role model that offers bright prospects for the rail sector, especially for strategic investors.

"It provides a quality management solution for high-speed rail routes both in operation and under construction," Luo said. "Also, it proves that high-speed rail lines can generate a profit ... even in the short term."

The Beijing-Shanghai line was initially proposed in 1990, but construction only began in 2008. Work was finished in 2011. The cost was about 208.8 billion yuan.

According to the China Railway Corp, total railway ridership in 2014 was 800 million people, and the Beijing-Shanghai high-speed line accounted for one-eighth of the whole.