China Development Bank (CDB), the country's largest policy
lender, plans to buy a stake in the management company of the
Beijing-Shanghai high-speed railway, sources said yesterday.
The unnamed sources confirmed a report by First Financial
Daily that the bank is expected to pay 10 billion yuan for an
8.7 percent stake in Beijing-Shanghai High-speed Railway Co
Ltd.
But the plan will be further discussed by and is subject to
approval of the board of the newly established management company,
the sources said.
Earlier reports had said three commercial banks - Bank of China,
Industrial and Commercial Bank of China and China Construction Bank
- were the possible strategic investors. However, the China Banking
Regulatory Commission didn't support the commercial banks' bid to
invest in the project and issued a notice to ban their
investment.
"But as a policy bank, CDB is not confined by the regulation and
has the obligation to support big infrastructure projects like the
Beijing-Shanghai high-speed railway," said Wang Wanjin, a railway
analyst with Southwest Securities.
The strategic investors in the project are the National Council
for Social Security Fund and Ping An Asset Management Co Ltd, each
with an investment of 10 billion yuan and 16 billion yuan in the
project for an 8.7 percent and a 13.9 percent stake in the
corporation.
Other investors are China Railways Investment Corp on behalf of
the Ministry of Railways, and infrastructure investment companies
of the local governments of Beijing, Shanghai and Tianjiin.
The Ministry of Railways previously estimated the cost of
building the high-speed railway at about 150 billion yuan. But a
source said the figure has been revised to 229 billion yuan because
of surging real estate, material and labor prices.
"The investment for the project is huge, and the Ministry of
Railways may invite more sponsors," Wang said.
The Ministry of Railways needs to spend 1.25 trillion yuan in
the current Five-Year Plan period (2006-10), which means it is in
bad need of capital, Wang said. "The high-speed railway project is
attractive to investors because it is believed to have the
potential to bring stable returns in the long term."
When the 1,318-km project is completed in 2013, it will take
passengers only about five hours to travel between the two cities,
compared with 10 hours now - with a peak speed of 350 km/h.
(China Daily January 9, 2008)
