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The national social security fund is likely to invest in the Beijing-Shanghai high-speed rail link and other railway projects. The fund and the Ministry of Railways are in ongoing negotiations about the investment, an anonymous source was quoted as saying in the China Financial News yesterday. This potential outflow comes at a tense time since similarly large investments promised by insurers have fallen short of ministry estimates. A total of 40 billion yuan (US$5 billion) from insurance companies has been approved for investment in the project, said Zhou Yanli, deputy chairman of the China Insurance Regulatory Commission. However, this sum is only that expected by the ministry, since the ministry and the commission agreed two months ago that 80 billion yuan (US$10 billion) needed to be contributed from the insurance business for the project. The Beijing-Shanghai high-speed railway project is estimated to cost at least 130 billion yuan (US$16.25 billion) according to its initial estimates. "The initial budget was made according to past experience that building 1 kilometer of high-speed track usually costs 100 million yuan (US$12 million)," said Liang Chenggu, news officer with the Ministry of Railways. "But the investment may increase along with the growing price of real estate and resettlement costs," he added. However, the China Financial News quoted an insider saying that the Beijing-Shanghai railway will cost at least 170 billion yuan (US$21.25 billion). Furthermore, if three related projects are included in the final bill, the total cost could exceed 200 billion yuan (US$25 billion), the newspaper said. At present, the National Development and Reform Commission (NDRC) is studying a feasibility report on the Beijing-Shanghai railway project, which includes details like the total investment needed. The commission approved the ministry's proposal to build the high-speed railway in March 2006, after more than a decade of debate on what technology the railway should use. The 1,320-kilometre line is expected to be completed and go into operation in 2010 in time for the World Expo in Shanghai. By then, with a cruising speed of 300 kilometers per hour and a top speed of 350 kilometers, the railway will slash travel time between the two cites from 13 hours to under 5. The ministry said work on the project is expected to start before the end of the year. Work has already begun on some related projects, such as new railway hubs and bridges along the route. Two projects in east China's Jiangsu Province the Nanjing Railway Station and the Nanjing Dashengguan Rail Bridge both began construction in September. Other related projects include the construction of a new Beijing South Railway Station. The project began last December with an estimated cost of 6.3 billion yuan (US$789 million). (China Daily November 8, 2006) |
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