Rail spending to rise 3% in 2013

CHINA is earmarking 650 billion yuan (US$104.5 billion) for railway development this year, the Ministry of Railways said yesterday, an increase of 3 percent from 2012's spending.

Last year, the ministry raised its annual target several times - from an initial 500 billion yuan to 630 billion yuan - as the government sped up approvals for infrastructure projects, including roads and subways, since the second half to stimulate economic growth.

Spending totaled 631 billion yuan last year, Minister of Railways Sheng Guangzu said. That indicated 124 billion yuan was spent in December alone, more than double the monthly average in the January-November period.

The world's longest high-speed railway, the 2,298-kilometer Beijing-Guangzhou line, became fully operational in December.

Of this year's budget, 520 billion yuan will be spent on infrastructure, Sheng said at the ministry's annual work conference, adding that 5,200 kilometers of new lines will be put into operation in 2013.

China's high-speed railway network, which has been a key driver of the nation's economy, got a boost from the government's 4 trillion yuan stimulus package introduced in 2008 amid the global financial crisis.

The ministry's annual railway spending peaked in 2010 at 842.7 billion yuan, but fell sharply to 590.6 billion yuan in 2011 following the sacking of Liu Zhijun, the former minister who championed the high-speed network, for corruption, and a fatal bullet train collision in Wenzhou, Zhejiang Province, in July 2011 that killed 40 people.

The scandals raised concerns about safety and costs in the high-speed railway sector and the financial health of the hugely-indebted ministry, which acts as a corporation in the debt market.

Early last year, Premier Wen Jiabao gave the industry a vote of confidence, encouraging investment to resume in the depth of an economic slowdown. That translated to budget increases by the ministry during the year and a surge in monthly investment in the second half.

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