According to AP, China’s government announced another cut in railway construction spending Friday amid concern about the debts of the world’s biggest rail network and the safety of its showcase bullet trains.
Beijing will spend about US$65 billion next year on railway construction, down from US$75 billion this year and a sharp drop from 2010’s US$112 billion. It has been scaling back plans amid concern about whether the Railway Ministry can repay its mounting debts. The rail ministry’s mounting debts have prompted concern about whether it will have to be bailed out by Chinese taxpayers. Private sector analysts say revenues from ticket sales and freight charges probably are insufficient to pay its publicly reported 2 trillion yuan ($300 billion) in debt.
Beijing reined in the rapid expansion of its bullet train network after a July 23 crash that killed 40 people triggered a public outcry about a system that critics say is dangerous and too costly for a poor country. Rail construction “has been almost halted” since the bullet train crash, said Xinhua.