Government Allows Railway Firms to Generate More Income from Land Development

Government Allows Railway Firms to Generate More Income from Land DevelopmentThe Central Government is now allowing railway firms to make more income in land development and constructing new transport hubs in the government latest move in stepping up the financial support for the debt laden sector. Currently the railway sector is suffering from mounting debt because of a State led investment in the past which prompted the government to implement reform in the finance model by allowing private investment.

Guided by the Cabinet, the government will be supporting railway transport firms in revitalizing the use of existing land through an independent development, lease or by any other means. The government will also be encouraging these railways firms to participate in the construction of integrated transport hubs that will connect railway stations that will house public transportation. This move will hopefully improve the railway firm’s ability in raising funds and revenues.

In April the government promised to create a fund that reached 200 billion to 300 billion yuan a year a part of their policy measure that will support the slow economy. This was part of a target stimulus measure by the government that included a quickening of railway construction and public housing projects.

Furthermore China Railway Corp. is increasing their annual investment by 20 billion to 720 billion yuan to increase the number of lines that the company plans to build. China Railway also inherited a 2.84 trillion yuan worth of debt from the Ministry of Railway which is in construction bonds.

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