China's railway firms to see comprehensive development in land use
CCTV.com
08-13-2014 00:20 BJT
China’s State Council, has released guidance to allow the development of land owned by railway companies. It is the first time such measures were formally issued in the form of a government document.
Land of railway stations and nearby areas now opens for private investment to enter.
The measure released by the Chinese government’s cabinet aims to boost the usage of land managed by railway transportation companies.
This means these companies can lend their land out, take stakes of land equity, or transfer usage right to other firms within the same railway group.
"This not only can be applied to main railways, but to inter-state railways. It will boost enthusiasm of investment from local governments. Because from their angle, the railway and land are theirs, and it means diversity of investments." Liu Bin, a researcher from Institute of Comprehensive Transportation of NDRC, Said.
This policy opens alternative growth drivers for the debt ridden China Railway Corporation. The company reportedly bears debt as much as 3 trillion yuan, accounting for over 60 percent of its assets.
"The rail plus land investment model is what the industry has high hopes on. The case is a success in Hong Kong. Rise in value of land along the railways can used to support railway constructions, improve financial situations of railway transportation companies, and raise funds." Liu Bin Said.
The guideline suggests the development of land be comprehensive and coherent with the new urbanisation process. Once these land are revitalised, it is expected to improve railway companies’ abilities to raise funds, and generate profit.