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China to begin construction of 35 railway projects

China Railway Corporation (CRC) will begin the construction of 35 new railway projects this year, state-run news agency Xinhua has reported.22 Feb 2017

Construction is due to begin on 2,100km of new rail lines, 2,500km of double-track lines and 4,000km of electrified railway, Xinhua said, citing government officials who spoke to Economic Information Daily.

Much of the work will take place in China's less-developed central and western regions to support poverty relief and improve connectivity, the news site said.

CRC has been given a budget of 800 billion yuan (£93 billion) for 2017, the same total as for 2016. Vice minister of transport Yang Yudong has said that China will spend 3.5 trillion yuan on railway construction between 2016 and 2020, Xinhua said.

By the end of 2016 China had 124,000km of railway network and the world's largest high-speed rail network at more than 22,000km. By 2020, the country aims to increase the high-speed network to 30,000km, connecting more than 80% of China's big cities, Xinhua said.

The World Bank said in a report last year that China has developed the world's largest high speed rail network, but is now faced with a choice in how it will finance further development.

CRC could: improve cash flow by reorganising its subsidiaries; use a public-private partnership model in developing land; gain income through telecoms services on its land; raise equity through IPOs on its more profitable subsidiaries; or sell some of the railway's large range of fixed assets, the World Bank said. 

The report was produced in response to a request for advice from CRC, which is looking for new capital sources and different financing channels.