Chinanews, Shanghai, Nov. 1 – Construction of the Beijing-Shanghai express train project is about to commence. In developing this project, China will not consider using overseas private funds for the time being. Rather, China prefers to turn the project company into a shareholding company and make it go listing in the Chinese stock market in future.

 

The Beijing-Shanghai express train project involves a budgetary fund of 220 billion yuan. The project company has a registered capital of 110 billion yuan. Of this registered capital, the Ministry of Railways has bought 35% of the company shares. The Bank of China, China Construction Bank, the Industrial and Commercial Bank of China, and National Social Security Fund Organization each plans to invest some 10 billion yuan in the project, an insider told the China Business News.

 

Meanwhile, the provincial governments of Hebei, Shandong, Jiangsu and Anhui, where the express train will pass, and investors from Beijing, Tianjin and Shanghai also plan to invest some money in the project. Their investment might together account for more than 20% of the total investment fund. About 23 billion yuan of this sum will be used to compensate and relocate farmers living in the construction area.

 

In addition to the 110 billion yuan of registered capital, the rest of the 110 billion yuan needed for the project will be collected through bank loans and bond issue.

 

Since no formal contract has been signed at present, it remains unknown as to how much money the four domestic bodies will invest in the project. Still, it might be possible that some other domestic bodies might join in in future.

 

Right now, many investing bodies are acting vying to contact the Ministry of Railways, as they all believe the project will surely turn profitable. At present, the fund provided by domestic investing bodies is sufficient for the construction and therefore, China will not consider raising overseas private funds for the project for the time being, the insider said.

 

Previously, there was a report which said that an overseas private fund organization might make investment in the Beijing-Shanghai express train project.