Learn mandarin - Investors spur railway reform

BIZCHINA / Center

Investors spur railway reform

By Xin Dingding (China Daily)
Updated: 2007-06-01 08:48

The China United International Rail Containers Co was formally set up May
31, 2007, marking the opening up of the railway industry. [Xinhua]

The Ministry of Railways announced yesterday that it had found five
overseas firms to invest in 18 railway container-distribution centers in
China, representing a major step forward for the financial reform of the
country's railway sector.

The ministry also announced the formation of China United International
Rail Container Co Ltd, which is to build and operate the 18 centers. The
centers will be located in regional economic centers throughout the
country.

China Railway Container Transport Corp Ltd, an affiliate of the ministry,
will be the biggest shareholder in the new firm, with a 34 percent stake.
China International Marine Containers (Group) Co Ltd will hold 10 percent.

As far as the overseas firms, the Hong Kong-listed NWS Service Management
Ltd will hold a 22 percent stake, while Hong Kong Promisky Investment Ltd
will hold 10 percent.

The Israel-based Zim Integrated Shipping Services Company, France-based
CMA CGM Group and Germany-based Deutsche Bahn AG will each take 8 percent
stakes.

Ministry spokesman Wang Yongping described the establishment of the joint
venture as "a milestone in the history of China's railway development".

"It also fully reflects our resolve to accelerate the financial reform of
the railway sector," Wang said.

An initial assessment of the plan to build the 18 centers forecast
investments worth at least 12 billion yuan ($1.60 billion). The company
will have $560 million in registered capital, or about 35 percent of the
total investment.

The ministry said it hoped having overseas investors on board would help
introduce new management concepts and sharpen railways' competitiveness
in the container transport market.

The ministry has been seeking foreign investment since last year.

Railways Minister Liu Zhijun told a national conference earlier this year
that local governments, State-owned and private enterprises, social
investment institutions and overseas funds were all welcome to invest in
the railways.

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