China's state-run railways plan to sell shares to private investors to help pay for massive construction and restructuring, a Railway Ministry official said Tuesday. China's economic blueprint for 2006-2010, recently endorsed by the ruling Communist Party, calls for the country to spend 500 billion yuan (US$62 billion; Ђ52 billion) on the railways, with several slated to launch initial public offerings, state media reports say. Listings could come as early as next year, the reports say.
"If the company is mature enough for an IPO, why not let it be listed on the market?" said Li Deming, a spokesman for the Railway Ministry. Li confirmed comments by the ministry's chief economist, Huang Min, reported in the British newspaper Financial Times, saying that foreign investors would be able to take minority stakes in national lines and majority or full ownership of local railways.
The railways are due to be divided up into separate companies, and the best-run would be encouraged to go ahead with IPOs, Huang said. Current plans call for the country to set up five independent corporations, though details of the breakup apparently have yet to be worked out.
China has already begun experimenting with private investment in the railways, on a limited basis, both to boost financing and to help break the monopoly of the state-run lines.
A 775 million yuan (US$96 million; 80 million) line under construction between the cities of Quzhou and Changshan, in eastern Zhejiang province, is about one-third owned by a private company, Changshan Cement Co.
The Guangshen Railway Co., which operates a line running between Guangzhou, capital of Guangdong province, and Shenzhen, which borders Hong Kong, has shares listed on the New York Stock Exchange.
With its economy growing at a rate of more than 9 percent annually, China has been accelerating construction of its railway lines, which turn away two-thirds of cargo due to lack of capacity.
The government plans to more than double the length of its expressways network over the next 30 years to 53,000 miles from the current 21,000 miles.
The Ministry of Railways has about 100 projects underway, including hundreds of miles of double-track lines and newly electrified lines, reports the AP. I.L.