The central government on Monday published detailed plans to innovate railway funding and speed up railway construction as the new leadership is devoted to deepening reforms.
The State Council said in a statement that railway investment this year is likely to exceed the planned amount. Also, for this year and the following two years, the central government will provide transitional subsidies for China Railway Corp, established in March after a separation of the now-defunct ministry of railways' government and enterprise functions.
These measures are expected to strengthen growth in the world's second-largest economy, which slowed to 7.5 percent in the second quarter of this year.
Railway construction should be accelerated in an attempt to exceed the 2013 investment plan, while the building of railways and related infrastructure should be prioritized in the western and less-developed areas, the statement said.
The reform will see railway fundraising methods diversified and encourage private investment in railway construction as the ownership and management rights of intercity, suburban and branch railways, as well as railways for resource development, will be open to local government and social capital.
In addition, a railway development fund to support national railway projects will be set up with founding capital from the central financial fund coupled with social investment. Private investors will gain reasonable rewards, although they will not directly participate in the construction and management, according to the statement.
"Before the railway freight price determined by the market and the accounting system for nonprofit transportation is established, central finance will support the CRC with transitional subsidies this year and the following two years in view of the latter's insufficient capital, heavy interest rate and the nonprofit function of railway transportation," the statement said.
Source China Daily
