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China – Further Investment Plans For New Railways Approved.

27 November, 2014

 


Proposals for the construction of four new railway lines in China have been given the go-ahead in the latest move towards expanding the country’s rail infrastructure.

China’s state-run Xinhua News Agency said on 26 November that the National Development and Reform Commission (NDRC) has approved proposals to build the railways at a total cost of nearly USD 11bn.

 

“It is the third time this month that China has approved new railway projects,” Xinhua said.

 

According to the NDRC, the new railways will be built in China’s northeastern Jilin Province, southwestern Chongqing, Shaanxi Province and the Inner Mongolia Autonomous Region.

 

Last month, blueprints for the construction of five additional airports and three railway projects were backed by the NDRC. Total investment in those projects, contained in feasibility studies presented to the NDRC, amounted to USD 24.4bn.

 

Xinhua said that the head of NDRC’s infrastructure bureau, Fei Zhirong, told a press conference on 26 November that, by the end of October 2014, the country had invested 590bn renminbi (USD 96bn) in railway projects, or 74% of total spending earmarked for railways for the year.

 

Fei said the country’s RMB 800bn railway investment target for 2014 “will be achieved”. Fei said China had planned to have some 7,000 kilometres of railway lines operational this year, but only around 32% of that total was currently operational.

 

Earlier this year Chinese Premier Li Keqiang called for increased private investment in the country’s railways, saying support provided solely by the state “must become a thing of the past”. Li praised the role railways play in “stabilising economic growth and social harmony”, but he urged the China Railway Corporation Limited to seek “innovative sources of new investment”, which he said would be important to reform.

 

An action plan on railway financing, backed by China’s state council (cabinet) in April 2014, called for a fund that would be open for private investment.

 

Last March, the World Bank approved a total of USD 600 million in loans to China for projects including improvements to public transport services and an expansion of railway capacity along a key transport corridor in the country’s northeast.

 

A World Bank paper has said the cost of high-speed rail construction in China is one third lower than in other countries thanks to extensive planning, greater standardisation and the development of “innovative and competitive capacity” in the manufacturing process.

 

According to the paper, ‘High-speed railways in China: a look at construction costs’, by the end of 2013 China had built a HSR network of more than 10,000 route kilometres, “far exceeding that in any other country and larger than the network in the entire European Union”.

 

References:

 

Please click the link below for more information.

 

‘High-speed railways in China: a look at construction costs’ (8-page / 768 KB PDF)

 

Pinsent Masons

 

For further information, please contact:

 

Richard Laudy, Partner, Pinsent Masons

richard.laudy@pinsentmasons.com

 

Nick Ogden, Partner, Pinsent Masons

nick.ogden@pinsentmasons.com

 

Homegrown Energy & Project Finance Law Firms in China 

 

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