PR China Looks to Slow Growth of Money-Losing High-Speed Rail

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jok
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Joined: 3. Apr 2021, 16:07

PR China Looks to Slow Growth of Money-Losing High-Speed Rail

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China looks to slow growth of struggling high-speed rail
BAI YUJIE and LU YUTONG, Caixin
April 1, 2021 00:30 JST
https://asia.nikkei.com/Spotlight/Caixi ... speed-rail
Accessed: 2021-04-04
China is introducing guidelines to limit new high-speed rail construction along underused routes as it seeks to drop projects that give short-term boosts to local economies but add to the huge debts of regional governments.

If a route is operating at less than 80% of capacity, then a second line should not be built covering the same route, according to guidelines released by the country's top economic planner and the transport authority on Monday.
The guidelines also say that new high-speed rail links should only be built to cities that already see more than 15 million total inbound and outbound trips per year.

[...]

With the exception of the busiest lines between the biggest cities, such as the link between Beijing and Shanghai, China's high-speed rail network loses money.

[...]

[E]xisting projects will be unaffected [...]

[T]he new five-year plan will also contain restrictions on new high-speed rail construction, said professor Zhao Jian, director of the China Urbanization Research Center at Beijing Jiaotong University.

https://asia.nikkei.com/Spotlight/Caixi ... speed-rail
Accessed: 2021-04-04
On basis of https://www.caixinglobal.com/2021-03-30 ... 82703.html
Accessed: 2021-04-04
Best regards,
jok

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jok
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Joined: 3. Apr 2021, 16:07

Re: PR China Looks to Slow Growth of Money-Losing High-Speed Rail

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To my knowledge, this is the first time that there are official statements from the political side in China that the HSR program as a whole is financially loss-making and entails high follow-up costs in its operation that cannot be covered by ticket revenues.
The costs and deficits appear to be substantial if there are project cuts as severe as those outlined elsewhere in the previously mentioned articles:
The railway operator said its funding from the central government had dropped 98% from last year, as the number of projects approved by the National Development and Reform Commission had fallen.
https://asia.nikkei.com/Spotlight/Caixi ... speed-rail
Accessed: 2021-04-04
Best regards,
jok

myreputationvault
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Joined: 28. May 2021, 09:12

Re: PR China Looks to Slow Growth of Money-Losing High-Speed Rail

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If a route is operating at less than 80% of capacity, then a second line should not be built covering the same route, according to guidelines released by the country's top economic planner and the transport authority on Monday.
The guidelines also say that new high-speed rail links should only be built to cities that already see more than 15 million total inbound and outbound trips per year.

User avatar
jok
Posts: 60
Joined: 3. Apr 2021, 16:07

Re: PR China Looks to Slow Growth of Money-Losing High-Speed Rail

Post by jok »

myreputationvault wrote:
28. May 2021, 09:15
If a route is operating at less than 80% of capacity, then a second line should not be built covering the same route, according to guidelines released by the country's top economic planner and the transport authority on Monday.
The guidelines also say that new high-speed rail links should only be built to cities that already see more than 15 million total inbound and outbound trips per year.
There are claims that, with the exception of the Beijing-Shanghai link, all Chinese high-speed wheel-rail links are operating at a deficit. Revenues do not cover the costs of operation, i.e. energy, personnel and service costs plus maintenance costs of guideway and rolling stock. Hence the new 80% capacity utilization rule. That is the claim.

Do you think this is true - or are such claims just negative propaganda?
Best regards,
jok

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