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Chinese Urban Rail Transit Mileage Will Reach 1,500 km by the End of 2010

www.shcri.com - In the recent ten years, the YOY growth of Chinese urbanization rate will be about 1%. With the rapid development of Chinese economy and urbanization and the significant increase in the urban passenger capacity, the pure common public transit cannot satisfy the soaring demands in Chinese cities, especially in large cities. In the opposite, urban rail transit has great advantages in resource saving, environmental protection and transport efficiency.

 

In the late over ten years, Chinese urban rail transit construction sees a high speed. From 1995 to 2008, the number of Chinese cities with rail transit was increased from 2 to 10 with the investment YOY growth of over RMB 10 billion. By the end of 2008, there were 10 cities with 31 operated urban rail transit lines, acquiring the operating mileage of over 800 kilometers. In 2009Q3, metro construction plans of 22 cities were approved by Chinas State Council with the total investment of RMB 882.003 billion (USD 129.14 billion).

 

The construction of urban rail transit brings opportunities and challenges for related industries such as the real estate, communications, machinery and building materials industries as well as provides development space for industries related to the urban rail transit. Chinese central government has issued relevant policies to give priority to the development of urban public transit, improving the utilization efficiency of transport resources and relieving urban traffic jam. China will also enhance the capital investment in the urban public transit construction. Moreover, Chinese local governments also release capitals and supporting policies for the allocation and upgrading of rail transit, comprehensive interchange hubs, station construction, vehicle and facilities.

 

According to requirements of Chinese government, the proportion of governmental capitals should be no less than 40% in Chinese urban rail transit construction. Therefore, Chinese city governments are the investment subjects in Chinese urban rail transit construction while the rest capitals come from bank loans, which are mainly repaid by Chinese government. As Chinese city governments provide financial guarantees for the investment and financing in the urban rail transit construction, commercial banks are quite willing to release loans for rail transit projects.

 

By the end of 2010, there will be 55 urban rail operating lines in China with the total mileage of 1,500 kilometers. Over 6,000 vehicles will be needed. Provided each vehicle is priced at USD 1 million, Chinese investment in rail vehicles will amount to USD 6 billion before 2010.

 

Cities applying to Chinas State Council for metro construction must meet following conditions: the urban population is over 3 million; GDP is more than RMB 100 billion; local annualized fiscal revenue exceeds RMB 10 billion. By the end of 2008, there were 50-60 cities meeting the standard, so there are huge potentials in Chinese rail transit industry. Chinese urban rail transit market is highly valued by Chinese domestic and international capitals.

 

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