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High-speed off rails, freight on

By Hao Di  (Global Times)

09:38, October 27, 2011

China's railway authorities are discussing plans to build a large freight line, as a number of high-speed rail projects have been put on hold due to a funding shortage.

Some say the move demonstrates a shift from focusing on high-speed passenger construction to freight, the China Business Times reported.

With a total investment of 159.8 billion yuan ($25.09 billion), a freight line for coal transportation linking the north and the south has been listed in the five-year railway construction plan.

The line from western Inner Mongolia to Central China, which is supposed to be the largest one in the country, will stretch 1,860 kilometers. It will connect the main coal producing provinces with consumption areas in a bid to secure stable energy supplies in Central China.

It starts in Ordos, Inner Mongolia, and has stops in Shaanxi, Shanxi, Henan, Hubei, Hunan and finally arrives at Ji'an, Jiangxi Province.

The Ministry of Railways called on local government departments, including development and reform commissions, in the provinces along the route to review the feasibility of the construction plan on October 14 and 15.

The line is scheduled to begin construction in 2012, and profiting by 2017.

The country reconsidered its railway development plan after a deadly bullet train collision on July 23 exposed problems with high-speed railway technology and management, the report said.

Unlike the high-speed railway projects that might not generate profits immediately, coal lines usually have rosy profit prospects.

According to the financial statement released by the MOR on August 1, in the first half of 2011, the ministry made a profit of 4.29 billion yuan ($ 673.47 million) and was in debt more than 2 trillion yuan with an asset-liability ratio amounting to 58.53 percent.

"Compared with the high-speed railways, the freight lines have relatively more mature technology and much lower operational risks, " Chen Hui, a senior engineer with China Railway Construction Corporation Group, a major railway construction company, told the Global Times.

"Railway projects covering more than 10,000 kilometers have been halted or been delayed due to the lack of cash," said Chen.

"The railway ministry has slowed payments to railway construction companies, and local governments and banks are also unwilling to lend money to railway projects," he said.

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