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Lack of cash brings rail projects to a standstill

(China Daily)

08:53, October 19, 2011

BEIJING - Many migrant workers on China's new rail projects have not been paid for months, due to a shortage of funds caused by the country's tightened policies on loans, and many are without a job as projects come to a halt.

The situation affects millions of migrant workers hired to lay new track, say experts, who also warn that the country's new roads are facing similar financial problems.

"An estimated 6 million migrant workers are employed by rail projects nationwide. If the projects cannot resume soon, these people and their families will all suffer," said Wang Mengshu, deputy chief engineer at China Railway Tunnel Group.

According to Wang, rail projects spanning a total of more than 10,000 kilometers, including 5,400 km of tunnels, have been suspended due to a shortage of funds and many migrant workers have not been paid for six months.

The rail construction companies also owe big sums of money to cement and steel suppliers, he added.

"The central government should make investments, pay the workers and suppliers, and complete the ongoing projects," Wang said.

Both the Ministry of Railways and China Railway Group declined to comment when contacted by China Daily on Tuesday.

Wang said one of the reasons for the halting of rail projects is that the central government has tightened its monetary stance to curb soaring inflation. China has raised the reserve requirement ratio for banks nine times this year and hiked interest rates five times to check excessive lending.

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