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$31b govt stimulus to revive railway projects

(China Daily)

10:24, November 02, 2011

Designers working for the CSR Sifang Locomotive and Rolling Stock Co Ltd in Qingdao, East China's Shandong province, examine a model of the CHR380A train on July 4. [Photo/ Xinhua]

BEIJING - The Ministry of Railways is expected to get more than 200 billion yuan ($31 billion) worth of financial support to pay off the dues and avoid liquidity, after lack of cash flow brought most railway projects to a standstill.

Official sources have confirmed that the ministry will get more than 200 billion yuan to pay off bills and continue key railway projects, Xinhua News Agency reported on Tuesday.

CSR Corp Ltd, China's biggest train manufacturer, said in a news release on Tuesday that it has received payment of trade receivables of nearly 6 billion yuan from the Ministry of Railways.

"We expect to receive most of the total account of receivables in November and December as the ministry routinely pays in the fourth quarter," it said.

CSR Chairman Zhao Xiaogang said in the release that he was fully confident of the future of China's railway development.

"The government did not change its mid- and long-term plans for the railway network, although the railways ministry's payment capacity is weak this year, caused by the sluggish global economic environment," he said.

A publicity official with the ministry told China Daily that the State Council, China's Cabinet, has given policy support to the railway sector in the past weeks.

"Right now, the National Development and Reform Commission (NDRC) is heading a study of the issue (of financial support), such as determining the body and form of investment," he said.

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