Government takes control of railway projects to prevent rising local debts
Global Times

Chinese authorities have urged the strengthening of supervision on urban transit design to avoid excessive pre-planning or construction projects that are too concentrated. 


Photos: VCG

The State Council, China's cabinet, unveiled guidelines on Friday to further supervise urban transit planning, within which local authorities should strictly control their debt levels and avoid financial risks by raising funds for transport-related projects, according to a statement published on the central government's website.  

For urban transit enterprises that have high debt ratios, they should halt the construction of new projects, the statement said. 

It also clarified requirements on urban transit planning in different cities. For instance, a city that plans to build a subway line should have a recorded public financial budget exceeding 30 billion yuan ($4.49 billion), with a local GDP volume of more than 300 billion yuan and more than 3 million permanent residents. 

China has seen rapid growth in urban transportation, which is in line with the country's urbanization process. As of the end of 2017, 33 cities were operating urban railway systems, with more than 150 lines overall, media reported in March.

In 2016, total investment in urban transit systems in China recorded 384.7 billion yuan, a record high. However, those long-term investments usually generate low profits, posing immense challenges to local governments.