Bei­jing seek­ing new pri­vate in­vest­ment to ex­pand sub­way: firm

The China Post - - WORLD BUSINESS - BY ZHENG JINRAN

Bei­jing plans to at­tract more non­govern­ment funds to fuel the rapid ex­pan­sion of the sub­way net­work, the com­pany re­spon­si­ble for pro­vid­ing fi­nance and plan­ning new projects has re­vealed.

Con­struc­tion costs have al­most dou­bled in the past six years, the Bei­jing In­fra­struc­ture In­vest­ment Co. said.

The tech­ni­cal and eco­nomic per­for­mance in­dex, which re­flects con­struc­tion costs, in­creased to 1 bil­lion yuan ( US$161 mil­lion) per kilo­me­ter in 2014 for sub­way lines in the down­town area, ac­cord­ing to fig­ures re­leased by the com­pany. The cor­re­spond­ing fig­ure in 2007 was 571 mil­lion yuan.

The mu­nic­i­pal gov­ern­ment has an­nual al­lo­ca­tions to fund sub­way con­struc­tion projects, and th­ese reached 15.5 bil­lion yuan in 2014.

Most of the money is pro­vided by the com­pany, which has in­vested more than 251.3 bil­lion yuan in the net­work in re­cent years — enough to build 110 Bird’s Nest sta­di­ums or 246 Wa­ter Cube aquat­ics cen­ters.

Now the cap­i­tal’s mu­nic­i­pal gov­ern­ment has re­leased a guide­line de­signed to at­tract more funds from pri­vate sources to fi­nance large public projects, in­clud­ing the sub­way.

Yang Xuhui, an of­fi­cial at the Bei­jing Mu­nic­i­pal Com­mis­sion of Devel­op­ment and Re­form, the city’s top eco­nomic plan­ner, said com­pa­nies can in­vest ei­ther alone or as a part of a con­sor­tium.

“More than one com­pany has shown an in­ter­est,” he added.

Bei­jing was the first city on the Chi­nese main­land to build a metro sys­tem, and there are now 18 lines cov­er­ing a to­tal dis­tance of 527 kilo­me­ters. The to­tal is sched­uled to reach around 1,000 kilo­me­ters by 2020 to meet the huge de­mand from the cap­i­tal’s pop­u­la­tion of more than 21 mil­lion. The ex­pan­sion should ease traf­fic con­ges­tion and re­duce air pol­lu­tion.

The cost of ma­te­ri­als, la­bor, ma­chin­ery and land ac­qui­si­tion and re­set­tle­ment has also con­tin­ued to rise, and this has pushed up the amount of in­vest­ment needed, the com­pany said.

Metro con­struc­tion projects in other cities have also been af­fected by ris­ing costs. It is es­ti­mated that at least 3 tril­lion yuan will be in­vested na­tion­wide in net­works that will cover a to­tal dis­tance of 6,000 kilo­me­ters by 2020, of­fi­cial Li Guoy­ong told China Busi­ness Times. Li works in the in­fra­struc­ture projects sec­tion of the Na­tional Devel­op­ment and Re­form Com­mis­sion, the coun­try’s top eco­nomic plan­ning agency.

There are cur­rently two com­pa­nies in­volved in run­ning the cap­i­tal’s net­work — city-owned Bei­jing Mass Tran­sit Rail­way Op­er­a­tion Corp, and Bei­jing MTR Corp, a public-pri­vate joint ven­ture with Hong Kong’s MTR.

On Feb. 8, Bei­jing MTR Corp. paid 15 bil­lion yuan for the right to op­er­ate Line 16 for 30 years. It al­ready runs Line 4 and Line 14.

Safety is a ma­jor con­cern both dur­ing the con­struc­tion process and af­ter new lines open.

Le Guip­ing, a spokesman for Bei­jing MTR Con­struc­tion Ad­min­is­tra­tion, which is in charge of build­ing the com­pany’s projects, said: “We have a safety and emer­gency com­mand cen­ter that mon­i­tors the whole process from con­struc­tion of the fa­cil­i­ties to test runs.”

The cen­ter came into op­er­a­tion in Jan­uary.

A sec­ond mon­i­tor­ing cen­ter is de­signed to en­sure that lines op­er­ate safely. This sup­plies in­for­ma­tion about pas­sen­ger flows and other data to the gov­ern­ment to help it reach de­ci­sions on the fu­ture devel­op­ment of the net­work.

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