Investment in rail building derails 26%
Source: Bloomberg News |
August 18, 2011, Thursday
|
Print Edition
Print Edition
CHINA'S rail construction investment slumped 26 percent last month after a deadly high-speed train collision prompted officials to suspend approvals for new projects and impose more safety checks.
Spending on building railroads in July amounted to 41.2 billion yuan (US$6.4 billion), compared with 55.8 billion yuan a year earlier, based on data the Ministry of Railways has released. It was the biggest drop in eight months.
"The slump in July construction investment started the downward spiral of China's rail investment," said James Chung, an analyst with Masterlink Securities in Shanghai. "I think it's impossible for the ministry to reach this year's investment target."
Rail investment in the second half of this year may plunge by 40-44 percent from a year earlier as new projects are halted, Chung said. The government ordered trains to lower speeds and reduced Beijing-Shanghai bullet-train services after the July 23 collision in Wenzhou in Zhejiang Province, which killed 40 people. A preliminary probe attributed the crash to a signaling fault.
The ministry said in May that rail construction investment this year will total 600 billion yuan, down from an estimate of 700 billion yuan.
Total rail construction investment in the first seven months of the year fell 2.5 percent from a year earlier to 283 billion yuan, according to the ministry data. In the first half, the figure was 242.2 billion yuan.
Spending on building railroads in July amounted to 41.2 billion yuan (US$6.4 billion), compared with 55.8 billion yuan a year earlier, based on data the Ministry of Railways has released. It was the biggest drop in eight months.
"The slump in July construction investment started the downward spiral of China's rail investment," said James Chung, an analyst with Masterlink Securities in Shanghai. "I think it's impossible for the ministry to reach this year's investment target."
Rail investment in the second half of this year may plunge by 40-44 percent from a year earlier as new projects are halted, Chung said. The government ordered trains to lower speeds and reduced Beijing-Shanghai bullet-train services after the July 23 collision in Wenzhou in Zhejiang Province, which killed 40 people. A preliminary probe attributed the crash to a signaling fault.
The ministry said in May that rail construction investment this year will total 600 billion yuan, down from an estimate of 700 billion yuan.
Total rail construction investment in the first seven months of the year fell 2.5 percent from a year earlier to 283 billion yuan, according to the ministry data. In the first half, the figure was 242.2 billion yuan.
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