China to dismantle Railway Ministry

BEIJING - China plans to dismantle the Ministry of Railways into administrative and commercial arms to reduce bureaucracy and improve railway service efficiency, a top Chinese official said Sunday.

The existing Railways Ministry, which is both a policy-maker and a service provider, has long been criticized for bureaucracy and unpleasant services.

The proposed state railways administration, to be supervised by the Ministry of Transport, will fulfill the existing Railways Ministry's administrative functions, according to a report delivered by State Councilor Ma Kai to the annual session of the country's top legislature on Sunday.

The proposed China railway corporation will carry out the existing Railways Ministry's commercial functions, Ma said in the report on the institutional reform of the State Council, China's cabinet.

The state railways administration will be responsible for establishing railway technology standards and supervising railway work safety, transport service quality and railway project quality, Ma said.

The China railway corporation will be responsible for railway transportation dispatch and command, freight and passenger transport business management and railway construction, Ma said.

After the department restructuring, China's transportation capabilities will be greatly enhanced through the integration and overall planning of various transport means, including rail, road, shipping and aviation, Minister of Railways Sheng Guangzu told media on Sunday morning

Meanwhile, the railway, itself, can give full play to its advantages in traveling long distances, transporting heavy loads and offering low carbon emissions, he said.

"After separating the administrative functions from the commercial functions, we can carry out more market research, better adapt to the market, provide preferable services to customers and have more room for development," he said.

Sheng said he did not have regrets about being the final railways minister.

"Whether I'm minister of railways or not does not matter," Sheng told media. "The key is to develop China's railways. I'm subordinate to the needs of the national cause."

Sheng did not disclose what his next position would be.

Some staff from the existing Railways Ministry were seen taking photos in front of the ministry's main building in downtown Beijing on Sunday morning, trying to keep the "super ministry's" past glory in mind.

Wang Yukai, a professor with the Chinese Academy of Governance, said the restructuring of the Railways Ministry will benefit the people.

After the commercialization of the country's railways, outside pressures are likely to push down railway operation costs, Wang said.

The participation of private capital will also increase the competitiveness of the railway sector and lower its operation costs, he said.

The restructuring worries Liu Qiang, 48, a rail maintenance worker in east China's Jiangxi Province.

"I tried hard to enter the railway system three decades ago, as it was considered a 'gold bowl' that would never break," said Liu, who works for the Nanchang Railway Bureau.

"What I'm most concerned about is whether I will be laid off or if my salary will be decreased, as I will become a corporate employee," he said.

Ministry hit by debt, scandal

While Chinese people enjoy the world's fastest train in operation, the robust development of railway construction has also brought huge debts.

The ministry's debt-to-asset ratio climbed to 61.81 percent at the end of September 2012, according to official data. The ministry's total assets amounted to 4.3 trillion yuan ($684.7 billion), and its debts amounted to 2.66 trillion yuan at that time.

With a length of over 9,300 km by the end of last year, China has the world's largest high-speed rail network in operation. It plans to have 18,000 km of high-speed lines in operation by 2015.

To achieve this goal, China will invest 2.3 trillion yuan in railway infrastructure during the 2011-2015 period, according to the 12th five-year plan for railway development.

With regards to its huge debts, Sheng Guangzu said the dismantling of the Railways Ministry will not affect railway construction investment.

Sheng said the debts of the Railways Ministry will be divided according to whether they are public or commercial. The debts will be properly reviewed and handled by relevant departments.

As the railway has undertaken many public functions and its development is at an important stage, the government will continue to support railway construction, accelerate reforms in railway investment, financing and pricing, and establish a sound transport subsidy system, Ma Kai said Sunday.

Another challenge for the proposed state railways administration and China railway corporation is how to win back people's trust in the railway system, which has been hit hard by a series of corruption and safety scandals in the past few years.

The country's former railways minister, Liu Zhijun, was expelled from the Communist Party of China for corruption in May last year following a high-speed train collision that left 40 people dead and 172 injured near the eastern city of Wenzhou in 2011.

Liu had accepted massive bribes and bore the major responsibility for the rampant corruption in the railways system, according to the the CPC Central Commission for Discipline Inspection.

An official with the Nanchang Railway Bureau said on condition of anonymity that the unreasonable concentration of power led to corruption.

He said he hopes separating the administrative functions from the commercial functions can curb corruption in the railway system.