Chinese Rail Investment Falls 61.8% in October

Date:2011-11-17     Source:liminghouhaizhen  Text Size:

November 17 -- Fixed-asset investment in China’s railway sector fell 61.8 percent year-on-year to 33.56 billion yuan in October, the third consecutive month in which the figure was below 40 billion yuan, reports

For the first 10 months, fixed-asset investment in the railway sector decreased 25.2 percent year-on-year to 428.99 billion yuan.

According to analysts, the great number of projects launched before the squeeze on funding had depleted the Ministry of Railway’s capital.

During the first 10 months, investments in railway infrastructure nationwide fell 28 percent year-on-year to 367.4 billion yuan, of which investments in October accounted for 20.5 billion yuan, the lowest monthly figure this year.

According to the Ministry of Railways, it will disburse payments it owes to suppliers by November 20 in order to ensure that the projects can continue.

An insider from a large state-owned bank said the ministry has 300 projects on hand, while its planned bond issuance could only raise funds sufficient for 10 projects.

Haitong Securities (600837.SH) predicts investments in the railway sector will pick up in the last two months as there will be an easing of the liquidity pressures.

The brokerage anticipates a 20 percent year-on-year fall in fixed-asset investment in the railway sector for the whole of 2011.

According to the Ministry of Railways, it intends to complete 600 billion yuan worth of of fixed-asset investments, of which investments made through October totaled 428.99 billion yuan. Investments in the railway sector peaked at 834.07 billion yuan in 2010.

The debt of the Ministry of Railways hit 1.33 trillion yuan in 2009, with a debt ratio of more than 53 percent. The percentage rose to 57 percent in 2010, and 58.53 percent in the first half of 2011.

The ministry posted after-tax profit of 137 million yuan during the first three quarters of 2011, with total debt of 2.23 trillion yuan, up 18 percent from end 2010.

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