Mon, October 27, 2008
Business > Industries

China's Cabinet approved huge money infusion to rail construction

2008-10-27 00:32:20 GMT2008-10-27 08:32:20 (Beijing Time) Xinhua English

BEIJING, Oct. 27, (Xinhua) -- The country's State Council has approved a total of two-trillion-yuan (292.2 billion U.S. dollars)investment in railways construction, which was set in the Mid-termand Long-term Railway Network Scheme issued in 2004, according the Ministry of Railway (MOF).

According to the plan, the country would need two trillion yuan for railway construction between 2004 and 2020. Now the approved investment has exceeded the 1.25 trillion yuan set in the 11th Five-Year Plan for the period from 2006 to 2010.

Analysts said the country would embrace the railway boom.

Of the total, 1.2 trillion yuan has been injected to the ongoing constructions.

By 2010, China's railway is expected to extend 100,000 miles. That will increase to more than 120,000 by 2020. At of the end of 2007, railways across the nation stretched 78,000 miles.

Shenyin and Wanguo Securities anticipated the three years between 2008 and 2010 would be a peak time for railway investments of 244.5 billion yuan, 341.9 billion yuan and 333.9 billion yuan, respectively.

MOC official Wang Yong said the total capital infusion would probably exceed the total of two trillion fixed currently as more investment opportunities might emerge.

He added new investments would help bolster the country's economy.

An unnamed official from the National Development and Reform Commission said the country's highway system was almost completed, but the railway network was still far from catching up.

He also noted the country would focus on rail construction as the current railways couldn't meet the need for traveling and freight.

From 2003 to 2007, the annual freight volume surged by 200 million tonnes, up 8.7 percent year on year, while the railways extended by 3.4 percent per year. The four year saw the fastest development of the country's railway.

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