The government has an investment target of more than 800 billion yuan for railway construction to expand China's high-speed railway network this year, build more intercity and city-suburb links, and work to complete a freight railway network.
Zhao Jian, a professor of rail logistics at Beijing Jiaotong University, said because of its administrative role, the CRC has no choice but continue to invest in these new projects. Therefore, gaining loans from both policy and commercial banks, and issuing bonds to raise capital for railway construction are only solutions for it to gain the cash.
"Introducing a public-private partnership model or forming joint ventures certainly can help the CRC reduce spending on public transport services, optimize work efficiency, and bring more conveniences to passengers and company clients," said Zhao.
The PPP model is where a government service or private business venture is funded and operated through a partnership of government and one or more companies from private sector.
According to a recent announcement by the NDRC, China's top economic planning agency, the CRC is being empowered to decide how much high-speed train tickets cost in light of "market competition and passenger distribution".
Previously, the price was set by the commission itself.
"This move should be welcomed. As a company in a market economy, the CRC should be free from the shackles of administrative intervention. Only by doing so can it make the best use of resources, raise efficiency, improve profits and better serve passengers," said Zhou Zhicheng, deputy director for research at the Beijing-based China Federation of Logistics and Purchasing.
China has more than 121,000 kilometers of rail lines in operation. More than 19,000 km of them are high-speed railways, accounting for more than 60 percent of the total in the world.
