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China road, rail ministries to speed up investment

(Agencies)
Updated: 2008-11-12 09:21

China's railway and road ministries have promised to invest quickly and aggressively to help execute the government's 4 trillion yuan ($586 billion) economic stimulus package.

Related readings: Govt sets $300b for railway construction Beijing announces $34b traffic plan Shanghai 'determined' to spend more on infrastructure $730b infrastructure plan on table

The Ministry of Railways plans to invest 600 billion yuan in 2009, up from 350 billion yuan this year, a figure that has been increased from the original target of 300 billion, according to Yang Zhongming, the head of the ministry's planning department.

"The scale of construction and size of investment will be unprecedented in China's railway history," Yang told the People's Daily newspaper.

He said next year's capital spending would eventually boost gross domestic product growth by 1.5 percentage points and create 6 million jobs. It would consume 20 million tons of steel and 120 million tons of cement, Yang said.

The ministry would ramp up investment over the rest of 2008, spending 150 billion yuan this quarter, he added.

He Jianzhong, a spokesman at the Ministry of Communications, said the pace of road building was also moving up a gear.

The ministry would complete investments totalling 300 billion yuan this quarter, bringing 2008 spending on highways to 800 billion yuan, He told state television on Tuesday.

In announcing its stimulus package on Sunday, the State Council, China's cabinet, identified a need to invest urgently to help cushion the world's fourth-largest economy from a downturn in global growth.

According to the plan, which runs through 2010, the central government will itself spend an extra 100 billion yuan by the end of 2008 and catalyze an additional 300 billion yuan from local governments, state banks and other sources.

Details of the pump-priming remain vague. It is unclear, for example, how much of the projected road and rail investments are included in the package. But the decision to turn on the spending taps is prompting ministries and local governments to aim high.

State television said 3.0 billion yuan would be spent on small airports.

The Economic Observer newspaper reported on Monday that the Ministry of Communication has plans to invest 5 trillion yuan in roads and ports by 2013.

Beijing will spend 240 billion yuan on subways and other transport infrastructure in the capital by 2012, more than the 170 billion spent in the five years before the Olympics. By 2012, the city expects to have 420 km of subway lines, up from 110 km now, to help ease road congestion.

And Guangdong has plans for 222 new investment projects worth a total of 2.37 trillion yuan, the Southern Daily newspaper on Monday quoted Li Miaojuan, head of the province's Development and Reform Commission, as saying.