Investment in Urban Rail Transit Shows Great Potential in China
Investment in the urban rail transit infrastructure in China, which includes light rail, subway and modern trams is showing great potential and is said to increase to 90 percent in the next five years, showing a market that is said to be worth billions of yuan a year. a transportation and Infrastructure Analyst in China Equities Research of UBS Securities Co. stated that the entire size of the investment in the sector for this year may increase to not less than 400 billion yuan in 2015 to 700 billion yuan in the next five years. this will make urban rail investment the same size with the railway sector.
With this new investment some railway construction companies might look into moving their business focus from railways to the urban transit network. The Ministry of Transport and the National Development and Reform Commission have also announced a three year plan that will boost the transportation infrastructure projects with a combined investment of 4.7 trillion yuan and a 1.6 trillion yuan allocated for urban rail transit projects. Around 51 projects with a total investment of 910 billion yuan are already in progress for this year, and will be another 33 projects with an investment of 480 billion yuan for 2017, 19 projects for 2018 with an investment of 258 billion yuan.
Approval and regulation process for cities applications in running urban rail transit projects were relaxed twice in 2013 and 2015. New standards are released that will allow cities to build urban rail transit for 1.5 million of its residents as opposed to the current requirement of 3 million. Once the new standards are applied, 30 more cities are eligible to apply and start urban rail transit projects tha twill bring an estimated investment of 1.7 trillion yuan. based on a data of the China Association of Metros and data from UBS Securities, the accumulated operating length in th urban transit network from subways, light rail, trams, single tracks, urban rapid rail transit and maglev is at 3,618 kilometers for 2015 and is expected to reach 9,472 kilometers in 2020.
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