The Ministry of Railways strictly forbids high-speed rail investment into the deceleration zone during the contraction period

"We must ensure that high-speed rail operations are absolutely safe." The Minister of Railways, Sheng Guangzu, stressed at a seminar on the safe operation of the Ministry of Railways that no unit or individual may arbitrarily shorten the construction period.

The Ministry of Railways has not responded positively to the problem of “decelerating” the construction of high-speed trains that the outside world is concerned about. However, Sheng Guangzu said that it is necessary to ensure that the "Twelfth Five-Year Plan" goal is achieved.

According to industry sources, the actual construction of the railway in the first half of this year did not meet the Ministry of Railways' construction investment plan. In contrast to the fact that in many parts of the country, the construction period was shortened or even opened to traffic in advance, the Ministry of Railways “must not arbitrarily reduce the construction period” requirement, and will inevitably further slow down the construction of high-speed rail and the speed of investment.

On the other hand, the construction of "deceleration" also originated from the financial side of tension. According to the reporter of the “Daily Economic News”, many railway projects currently under construction have been affected by the lack of loans. According to media reports, due to the increasingly heavy debt burden, the Ministry of Railways may withdraw from the investment construction of certain regional railways and take the initiative to abandon the status of major shareholders. The semi-annual report released by the Ministry of Railways shows that the debt of the Ministry of Railways has exceeded 2 trillion yuan.

In this case, the high-speed rail concept stock that once was rampant was also unable to escape the "slow down" fate.

Railway investment growth slowed down in the first half of the year

On August 2nd, Sheng Guangzu asked at the symposium to deeply learn lessons from the “7.23′′ 甬 temperature accident” and take effective measures to ensure the safety and stability of the railway transportation. At the same time, he expressed the need to ensure the realization of the “Twelfth Five-Year Plan” construction goals.

For the high-speed rail projects that have existed in recent years, the construction period has often been shortened and even opened to traffic. The Ministry of Railways has decided to strictly implement the construction period of the railway construction project, with the project quality as the core, respecting the objective laws of project construction, and scientifically and rationally determining the schedule of construction. Units and individuals must not arbitrarily compress the construction period and ensure the orderly progress of construction projects.

According to an insider of the Ministry of Railways, after Sheng Guangzu took up the post of Minister of Railways at the beginning of this year, the attitude of the Ministry of Railways on the high-speed rail has changed from the previous "quick-seeking" to "seeking stability."

In fact, at the beginning of this year, the Ministry of Railways began to significantly reduce the scale of investment in high-speed rail and reduce the speed of high-speed rail. In addition to safety considerations, this measure also has economic considerations.

After years of high growth, the increase in investment in railway fixed assets across the country fell in the first half of this year. According to the Ministry of Railways statistics, from January to June, the country’s railway investment in fixed assets totaled 278.1 billion yuan, an increase of 2.7% over the same period of the previous year; of which, capital construction investment totaled 242.2 billion yuan, an increase of 3.1% over the same period of the previous year. The increase in previous years is double digits.

Zhao Jian, a professor at the School of Economics and Management at Beijing Jiaotong University, told the Daily Economic News reporter that due to safety concerns, the construction speed of China's high-speed rails should slow down. In his opinion, the Ministry of Railways should have changed the "progressive" high-speed rail development model that had been implemented for seven years before.

Xu Fengxian of the Institute of Economic Research of the Chinese Academy of Social Sciences said that in addition to the recent car rear-end collision incident, the incidents such as high-speed rail power cuts and lightning strikes have occurred frequently. These accidents fully reflect the high-speed railways in China in terms of hardware facilities or railway operation management. On the other hand, there are still major shortcomings, and the pace and rhythm of the corresponding high-speed railway construction should slow down.

Ministry of Railways or exit part of regional investment

An industry analyst who did not wish to be named stated that the actual construction of the railway in the first half of the year did not meet the Ministry of Railways' construction investment plan. From January to June, only 32% of funds were put into place for the railway projects under construction in Zhejiang Province, and the Shanghai-Nanjing high-speed railway was partially suspended. It is understood that most of the railway projects currently under construction are affected by the lack of loans.

The above-mentioned analysts stated that the personnel changes at the senior level of the Ministry of Railways at the beginning of the year were a major factor in the declining railway investment. At the same time, among the sources of railway construction funds, bank loans accounted for the highest proportion, but bank credits are tight, and some loans that were originally considered to have been implemented have not been put in place.

According to sources close to the Ministry of Railways, the tightening credit environment has led major banks to request the Ministry of Railways to accept the benchmark lending rate at the beginning of this year and no longer offer a 10% loan discount, but the tough Ministry of Railways initially refused to accept this adjustment.

A few days ago, sources revealed to the media that the Ministry of Railways, which has increasingly heavy debt burden, is ready to withdraw from investment in some regional railways. Even if it participates in investment, it will no longer require major shareholders. Prior to this, the Pearl River Delta Intercity Rail Transit project has been launched. The Ministry of Railways hopes to no longer participate in future investment in other lines after the completion of three projects under construction, namely Suiwanshen, Guanhui, and Fojing.

This news was confirmed by two other railway system personnel. One of the sources said that not only the province of Guangdong, but also the former Ministry of Railways Minister Liu Zhijun had taken the Ministry of Railways as a major shareholder's subway line. The Ministry of Railways has also withdrawn all funds this year.

“The Ministry of Railways is not allowed to arbitrarily reduce the construction period. First of all, due to safety considerations, the slowdown in railway construction will become inevitable.” Zhao Jian said that with the slowdown in high-speed rail construction, the growing debt burden of the Ministry of Railways will ease.

High-speed rail stocks face shuffle?

Analysts said that the increase in the debt ratio of the Ministry of Railways is related to the great leap forward of high-speed rail in China in the previous years. As of the end of 2010, China had a total of 18 high-speed rail lines open, operating mileage of 5253.3 kilometers, with a total investment of 481.6 billion yuan. Together with the three new high-speed rail lines opened this year, the total cost of these 21 high-speed rails will be 726.2 billion yuan.

It is the climax of this wave of high-speed rail construction that has fed a batch of listed companies. According to "Daily Economic News" previously reported that in the New Year's 6-year period, a total of 25 companies in the A-share market's main business involved in the high-speed rail industry chain. Combining the financial data of these companies over the years, it has obvious characteristics: the rapid growth of income scale, high gross profit margin, and high return on net assets can be described as attaching high-speed rail to “famous for wealth and income”.

Now, with the possible slowdown in investment in high-speed train construction in the future, these companies will surely be affected. Some industry analysts told reporters that in the future the stocks of the high-speed rail sector may be divided. On the one hand, companies whose main business is not particularly dependent on the high-speed rail-related industrial chain may turn to new profit growth points, which will gradually move out of the market. Some companies suffering from severe "dependency" will face greater risks. "In short, with the possible cooling of investment enthusiasm, high-speed rail stocks will inevitably have to accept a shuffle."