Breakup first, then debts for Ministry of Railways reform
时间：2013-03-13 01:14:31
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BEIJING, March 11 (Xinhua) -- The first challenge for the Ministry1 of Railways (MOR) is to ensure the smooth separation of administrative2 functions from its commercial operations, while its debts will be handled next, an official involved in planning China's latest cabinet restructuring said Monday.
"The reform will split the MOR first and launch a new company to take over its commercial operation," Wang Feng, deputy director of the State Commission Office for Public
Sector3 Reform, said at a press conference while explaining the central government's latest institutional reform package.
The State Council, or China's cabinet, on Sunday announced a plan to
dismantle4 the MOR into administrative and commercial units.
The proposed State Railways Administration will be supervised by the Ministry of Transport and perform the administrative functions of the
defunct5 MOR, while the planned China railway corporation will run commercial businesses which are now controlled by the MOR.
"The debts issue for the new company will be settled next as part of its further reform, but not at the current stage for
functional6 breakup," Wang said.
He said the new company needs to establish a modern
corporate7 system to carry out future investment and financing reforms, while the state will continue to support it through appropriate means.
MOR financial statements showed its total assets stood at 4.3 trillion yuan (685.6 billion U.S. dollars) as of September 2012, while the total liabilities stood at 2.66 trillion yuan, with a debt-to-asset ratio of 61.8 percent.
On Sunday, Yi Gang,
vice8 governor of China's central bank, warned that the MOR debts must be properly handled to
stabilize9 expectations of lenders, the market and the public, adding that a number of national and regional banks, big or small, have been involved in the construction of railways for years.
According to the MOR, China had 98,000 km of rail lines, including 9,356 km of high-speed rail lines, in operation at the end of 2012.
Minister of Railways Sheng Guangzu also promised on Sunday to properly solve the debts owed by the MOR, for business purposes and for public welfare as well.
Sheng expressed hope that private capital and foreign funds could
actively10 participate in
incorporation11 of the new company.
The breakup plan also triggered public concerns that train fares will rise soon, as Sheng described the average train fare as "
relatively12 low." Sheng said the future pricing of train tickets should be
decided13 by the market law.
The MOR recorded a combined revenue of 975.2 billion yuan last year, up 15 percent from a year earlier, MOR data showed.
The State Council's breakup plan for the MOR is subject to the vote of the first session of the 12th National People's Congress.
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