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High-speed rail lines imperilled by funding shortage

3 February 2010
A funding shortage could hinder China’s ambition of creating a modern railway network, according to an article in South China Morning Post. Some difficulties were experienced last year as funds from the Rmb4,000bn stimulus package dried up and they may continue to impact high-speed rail projects in 2010. The report said that a high-speed network can cost up to three times as much to build as a regular railway network.

In September 2009, the Ministry of Railways announced it would build 42 high-speed passenger rail lines over the following three years, with a total length of 13,000km.

Operators also face the problem of ticket pricing, as many potential passengers can’t afford to travel on high-speed trains. “If the price is too high, nobody will take them. If the price is too low, there will be financing difficulties,” said Geoffrey Cheng, director of Asian equity research at Daiwa Securities.
     
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