China's high-speed railway boom to continue

About 5,209 km of new high-speed railways will be put into operation in 2013, 2,738 km more than last year, global financial services provider UBS AG forecasted.

In 2012, about 250 standard sets of high-speed trains were delivered in China, and UBS projected the Ministry of Railways will place new orders for 400 more trains this year upon completion of the high-speed railway network.

According to UBS estimates, 60 percent of the trains will operate on 200 km per hour speed lines, and the rest will run at 300 km per hour.

“The Ministry of Railways has not signed large orders since it placed a gigantic order of nearly 100 billion yuan ($16 billion) in 2009, and the major high-speed train orders should be used up in March,” said Richard Wei, head of UBS Asia transport research.

Wei estimated that about 20,463 km of high-speed railways will be in service by 2015, compared with 9,337 km at the end of 2012. To cope with the gigantic investment in railway network expansion, the Ministry of Railways must augment its financing avenues or it will face a severe capital shortage, analysts said.

The ministry is already burdened with more than 2 trillion yuan in debt, and the construction nationwide of high-speed railways will put new pressure on the ministry over the next few years, Wang Mengshu, a member of the Chinese Academy of Engineering, was quoted on Monday by the Economic Information Daily as saying.

Wang suggested the central government allocate more money for railway building as the railway plan is part of the State strategy. Local governments should also help finance railway projects because the new lines will boost economic development and create more jobs, Wang said.

“I think the three sides should jointly undertake the investment of railway construction. The ideal investment ratio is that the central government take up 40 percent of total investment, the Ministry of Railways take another 50 percent share, and the local government to pay 10 percent,” Wang added.

A draft plan showed that 630 billion yuan will be spent on China’s railway construction in 2013.