RMB 40 bln to be invested in the new railway
The Ministry of Railway will invest RMB 40 billion, taking a stake of around 35% in an investment group to finance the Beijing-Shanghai high-speed railway.
The new firm, the Beijing-Shanghai High-Speed Railway Corp, is expected to be established before the end of the year, sources said.
Five institutional investors, including Bank of China<601988><3988>, the Industrial and Commercial Bank of China (ICBC)<601398><1398>, China Construction Bank<601939><939>, the National Council for Social Security Fund and a foreign private equity, will take a total stake of about 45% in the firm by investing RMB 10 billion each.
Six local government of Beijing, Shanghai and Tianjiin municipalities and Hebei, Shandong, Anhui and Jiangsu provinces will inject RMB 20 billion in cash.
In addition, the nation’s three major insurers, China Life Insurance Co Ltd<601628><2628><LFC>, Ping An Insurance (Group) Co of China Ltd<601318><2318> and the People’s Insurance Co. Ltd of China (PICC), also show great interest in the firm. They have approached the ministry about taking a stake in the investment vehicle.
With registered capital of RMB 110 billion, the Beijing-Shanghai High-Speed Railway Corp is expected to eventually cost more than RMB 200 billion, due the surging real estate prices and resettlements.
The 1,318-km-long project could shorten the travel time between Beijing and Shanghai from 10 to about 5 hours, with a peak speed of 350km. The current railway between the two cities is the busiest line in China, accounting for 10.2% of the nation’s passenger transport volume.
The cost for a one-way trip is expected about RMB 600 to 700-far less than the standard airfare of more than RMB 1,200.
Tags: China Investment, Railway
[...] China Trade Information wrote an interesting post today on RMB 40 bln to be invested in the new railwayHere’s a quick excerpt The Ministry of Railway will invest RMB 40 billion, taking a stake of around 35% in an investment … billion in cash. In addition, the nation’s three major insurers, China Life Insurance Co Ltd, Ping An Insurance (Group) Co of China Ltd [...]
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