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China sets up $167 billion state-owned railway corp.
Published on: 2013-03-18
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altThe former Ministry of Railways has been split into three entities. The most important one is the new corporation, with a registered capital of CNY 1.04 trillion , or over USD 167 billion. It will be a wholly state-owned enterprise, supervised by the Ministry of Transport.
 
The decision was made as the ministry had been facing huge debt and allegations of corruption over the past years. At the end of the third quarter last year, total outstanding debt reached CNY 2.7 trillion.
 
Railway officials say both the central government and the new corporation will take on the task.
 
"We will use the profits generated by the company's operations to pay off part of the debt. And for the rest, the government will take care of it, as the railway construction belongs to the public framework that helped develop the country's western areas."
 
Officials from the restructuring body echo this comment, saying the government will further focus on railway development to boost infrastructure across the country.
 
"The rail system in China is undergoing an era of great leap forward. The government will continue its support for the railway construction, not only as public works, but also as a business."
 
Minister Lu also says that the new company will focus on transport safety and quality service. Ticket prices will be set according to market demand, with the government intervening when necessary. 
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