Private capital infusion to break China’s railway monopoly

The introduction of private capital in railway construction and operations will help break monopoly in the industry, a top official said Monday.

It has been difficult for private capital to enter the railways system as the existing Ministry of Railways has the functions of both a government department and an enterprise, Wang Feng, deputy head of the State Commission Office for Public Sector Reform.

China plans to dismantle the Ministry of Railways into administrative and commercial arms to reduce bureaucracy and improve railway service efficiency, according to a government restructuring plan submitted to the National People’s Congress (NPC) Sunday, reported Xinhua.

The proposed state railways administration, to be supervised by the Ministry of Transport, will fulfill the existing Railways Ministry’s administrative functions.

The proposed China railway corporation will carry out the existing Railways Ministry’s commercial functions. As an enterprise, the corporation is open to private capital investment, Wang said on the sidelines of the NPC session.

Wang said the introduction of private capital will bring in competition. A more diversified investment and operation structure will instill vitality to the railways industry.

Wang also stressed that the railways industry is different from other sectors.

The dispatch and command of railways must be unified and the construction of the overall network must be under integrated planning, he said.

The proposed corporation will be in charge of management, railway construction and railway safety, he said.