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January 30, 2010

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Home » Metro » Public Services

New revenues sought for Metro

SHANGHAI lawmakers are proposing to widen financing methods for the city's Metro system to help cut the cost of riding the subway.

"Income from Metro fares shouldn't be the main source of revenue for Metro firms," said Li Qingjuan, one of 12 Shanghai People's Congress deputies from the Huangpu District who are behind the proposal.

"The Metro firms can also ride on commercial projects close to Metro lines to expand their income, cutting reliance on fares income and reluctance to cut fares."

Stock and bond markets can also be leveraged to cut the financing cost of the metro companies, the group said.

Metro fares in Shanghai range from 3 yuan (44 US cents) to 9 yuan per journey.

"Transport is a key issue for the general public," Li said. "I believe in better traffic, better life. Decreasing the public cost in Shanghai can help shore up the city's allure."

Qian Yaozhong, an SPC deputy and executive vice president of Shanghai Shentong Metro Group Co, said he welcomed the advice and suggestions.

A banking syndicate is now the main financing channel for Shentong, offering a relatively competitive loan rate, according to Qian.

"Metro lines, linking downtown with rural satellite cities, can create new growth engines for the local economy," Qian said. "We're already seeking low-cost financing sources and the banking syndicate is a good option now."

Shentong is the sole builder and operator of the local Metro lines.

Shanghai's first Metro line started operation in 1993. There are now 10 lines with 330 kilometers in length. There will be 13 lines by 2012, 500 kilometers in length. The system is expected to carry 8 million passengers daily then.


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