Warning that railway reform will put greater emphasis on profit

Traveling by train could become more expensive than flying after the reform of China's railways authorities, a top engineer said.

Wang Mengshu, deputy chief engineer of the China Railway Tunnel Group and a member of the Chinese Academy of Engineering, predicted the debts built up by the now-defunct Railways Ministry will lead to a rise in prices.

Railway freight costs have not increased for 30 years, but that will end after the establishment of China Railway Corp, the 75-year-old said.

He also expressed concern the corporation is likely to construct the most profitable railways rather than the most needed.

Wang made the remarks at this year's session of the National People's Congress, which ended Sunday.

During the session, the Ministry of Railways, which was established in 1949, was dismantled. China Railway Corp has taken over its commercial functions, while the administrative functions were absorbed by the Ministry of Transport.

The reform was in response to public criticism over the fact the Railways Ministry was both a policymaker and service provider.

The demand for reform also grew after allegations of corruption were leveled at Liu Zhijun during his time as railways minister, as well as the deadly high-speed rail accident that killed 40 people in July 2011.

Wang said that steady railway prices have contributed to the country's economic growth. However, China Railway Corp will have to take high costs and its mountainous debt into consideration when setting new ticket prices.

Railways Ministry data showed that by the end of September, the authority had amassed a debt of 2.66 trillion yuan ($428 billion).

Wang said most of the debt was caused by the rapid expansion of high-speed rail.

"Take the Beijing-Shanghai high-speed line for example," he said. "Authorities borrowed 250 billion yuan from the banks, and as a result they had to pay more than 10 billion yuan in interest a year."

Wang called on the central government to pay part of the debt from revenues, as construction of the railways benefits most citizens.

"If the central government refuses to cover part of the debt, the corporation will have no choice but to raise ticket prices," he said. "Some tickets for high-speed lines will probably cost more than airline flights."

His remarks have stirred controversy. Some people criticized him for defending the monopoly status of China Railway Corp, while others praised his honesty.

China Railway Corp had not responded to Wang's remarks as of Tuesday afternoon.

Railway authorities are revising prices for freight and passengers, and ticket prices will be flexible, Beijing Morning Post quoted a railway official as saying on Tuesday.

Meanwhile, Lanzhou Railways Bureau said on Monday it is offering discounts on 19 short routes until Dec 31, excluding major holidays.

anbaijie@chinadaily.com.cn

(China Daily 03/20/2013 page3)