China‘s heavily-indebted Ministry of Railways suffered a loss of 7 billion yuan ($1.1 billion) in the first quarter, local media reported on Thursday, after steep debt repayments of more than 28 billion yuan depleted its cash holdings.
The Beijing Times reported that although the ministry recorded revenue of 210.9 billion yuan for January-March, high operating costs including 28.4 billion in capital and interest payments pushed it into the red.
China’s national auditor said in March that it had uncovered evidence of fraud, waste, mismanagement and irregular accounting and procurement totalling billions of yuan at the rail ministry’s flagship high-speed Beijing-Shanghai railway, feeding public anger that peaked when high-speed trains collided on a new line last July, killing 40 people.
The crash led Beijing to slow rail investment in the second-half of 2011, in part to placate public anger, but it seems to have discarded the stance this year, calling for more “urgently needed” rail lines to aid economic growth.
In March, Premier Wen Jiabao was quoted by local media as saying the government had approved new railway projects.
The rail ministry is the country’s largest seller of government bonds after the treasury. The Beijing Times reported that the ministry had outstanding debt of 2.43 trillion yuan as of the end of March.
- Bank of China profit disappoints, signals rough quarter for peers (chinadailymail.com)
- More Fraud Turned Up On China’s High-Speed Rails (chinabystander.wordpress.com)
- Report of China rail section collapse jolts shares (news.yahoo.com)
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