Source: China Daily

12-07-2008 18:00

China, the world's biggest railway operator, will push ahead with plans to sell shares in State-owned train companies even after a 64 percent slump in the mainland stock market this year.

A railway line under construction in the Xinjiang Uygur Autonomous  Region. China will carry out plans to sell shares of State-owned train  companies despite slum in the mainland stock market. [China Daily]

"We will sell shares once conditions are ripe," said Wang Yongping, a Ministry of Railways spokesman. "We are facing some difficulties in the market, but I believe we will make it through." He declined to provide a timeframe for the IPO plans.

The government aims to sell rail shares in Hong Kong and on the mainland to help fund a 1.25 trillion yuan expansion plan designed to ease congestion on the nation's rail system. The country's locomotives haul about one-quarter of global rail traffic on tracks accounting for about 6 percent of the worldwide rail network.

"It is very expensive to expand tracks, but the government has to" in order to support the country's economic growth, said Richard Lee, an analyst with Core Pacific in Hong Kong. "The capital gap is going to be quite huge and the government needs to raise funds."

China first laid out plans for rail share sales at least two years ago. The country intends to lay 17,000 km of track in the five years ending 2010 to ease delays in hauling coal, metals, grain and other commodities throughout the country. New lines will also be paid for with bank loans and by using funds from the central and local governments, Wang said.