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CHINA / Regional |
Lead firm named for rail projectBy Xin Dingding (China Daily)
Updated: 2007-12-28 07:25 The expected launch of the high-speed rail line between Beijing and Shanghai is on track for 2013 after the government announced the establishment of the project's management company Thursday. The Beijing-Shanghai High-Speed Railway Co Ltd will head the ambitious project that will allow trains to travel at up to 350 kph between the two cities, cutting the current travel time by rail from 10 to five hours. Construction of the project is yet to start. Vice-Minister of Railways Lu Fudong announced the name of the company yesterday. The principal investors in the project are the National Council for Social Security Fund and Ping An Asset Management Co Ltd, one of the country's three major insurers, Lu said. Other investors are China Railways Investment Corp on behalf of the Ministry of Railways, and infrastructure investment companies of the local governments of Beijing, Shanghai and Tianjiin municipalities and Hebei, Shandong, Anhui and Jiangsu provinces. Five institutions tipped as possible investors in earlier reports: Bank of China, the Industrial and Commercial Bank of China, China Construction Bank, the National Council for Social Security Fund and a foreign private equity fund, did not make the final list. The ministry did not reveal the registered capital of the company, nor mention the stake of each investor. However, a notice issued by the railway's preparation office earlier this month said the ministry would take a 78.9 percent stake in the investment vehicle to finance the project, with other investors holding the remainder. Industry sources have said the company will have a registered capital of about 110 billion yuan ($15 billion). Once completed, the 1,318km high-speed railway is expected to be the world's longest, Lu said. Industry observers have predicted the project's cost will exceed 200 billion yuan, given the rising costs of raw material and labor, much higher than the 130 billion yuan the ministry predicted when the project was approved by the government. The railway is believed to have the potential to bring investors stable returns in the long term, Lu said. The current line between Beijing and Shanghai is the country's busiest, accounting for 10.2 percent of the nation's passenger volumes. Long Hua, an analyst with Haitong Securities said the project could become the most profitable railway in China. The railway has 21 stations and can transport at least 80 million passengers a year. The fare for a one-way trip is expected to cost 600 to 700 yuan. |
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