First railway funded by private capital begins construction in Zhejiang

(ezhejiang.gov.cn) Updated : 2016-12-23

Jiulong Mountain in Taizhou saw the start of construction on the Hangzhou-Shaoxing-Taizhou Railway on Friday, which has attracted national attention because the railway will be the first in China to be predominately funded by private capital.

Fosun Group, a large Chinese investment company, together with other private held funds, is behind the remarkable project, which will build a 224-kilometer high-speed railway to connect nine regions in Zhejiang province, including Xinchang, Tiantai and Wenling.

Wen Xiaodong, CEO of Fosun's subsidiary Sunvision Capital, said that investment in the railway is expected to exceed 44 billion yuan ($6.33 billion), and private funding accounts for 51 percent of the total capital for the project. The governments of Shaoxing and Taizhou, two cities in Zhejiang province, and the state-owned China Railway will fund 49 percent with other investments derived from bank loans.

According to Wen, other partners, including Geely Holding Group and Wanfeng Auto Holding Group, will invest more than 100 million yuan in the project.

"Before the Hangzhou-Shaoxing-Taizhou Railway there were few successful cases of private railway investment," said Luo Renjian, a researcher at the Institute of Comprehensive Transportation of National Development and Reform Commission, "the obstacles lie with the operation, profiting and withdrawal."

When the Hangzhou-Shaoxing-Taizhou Railway finishes construction, the private investors, together with local governments and China Railway, will establish a management company for operation.