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SHANGHAI—China’s railways, used by more than 1 billion
passengers annually, may make their first combined loss
in a decade because of rising fuel costs and disruptions
caused by snowstorms and an earthquake, the Ministry of
Railways said.
The
government aims to return the mainly state-owned
companies to profit by winning overseas investment and
by introducing a “more market-oriented regime,” Wang
Yongping, a ministry spokesman, said in a June 20
interview in Beijing. He didn’t provide an exact loss
forecast.
Chinese
train operators may make a loss because they scrapped
services after the February snowstorms and last month’s
earthquake to help with relief efforts. The companies
are also struggling with higher coal and electricity
prices, as they haven’t been able to raise passenger
fares for 12 years.
“The
control of railway ticket prices is a huge barrier,”
Wang said. “However, we hope to find a solution,
balancing the industry’s profitability and its role as a
major public service.”
Fare
increases have to be approved by the National
Development and Reform Commission, China’s top planning
agency. Prices for moving coal, iron ore and other
cargoes have also remained little changed over the past
decade, at an average of 0.0925 yuan per ton-kilometer,
according to the ministry.
Guangshen Railway Co., which is listed in Hong Kong and
Shanghai, posted a 40-percent drop in first-quarter
profit. The company runs trains in Guangdong province,
one of the areas hardest hit by the snowstorms, China’s
worst in five decades.
The
nation’s railways are operated by dozens of different
companies spread across the country, most of which
aren’t listed. China may begin selling shares in more of
them, particularly those with a limited network and a
focus on moving coal or other materials, Wang said.
“It’s an
industry with stable incomes and low risks,” he added.
Daqin Railway Co., operator of China’s biggest
coal-transport line, listed shares in 2006.
China is
also building more high-speed railway lines to cut
travel times, Wang said. A high-speed track connecting
Beijing and neighboring Tianjin, where trains can run as
fast as 380 kilometers per hour, will start operations
on August 1, Wang said.
The
nation’s railways moved 1.36 billion people last year
and 3.1 billion tons of cargo, according to the
ministry. (With reporting from Shanghai, Bloomberg) |
