Concessioning, Privatization and Restructuring of Railways in China

Within the past 10 years, railway concessioning of formerly government-operated railways has emerged as a strong global trend in order to improve operating efficiency as well as a means to generate private capital for their construction. This trend is strongly supported by the World Bank and other international lending institutions. The concept of privatization and commercialization of railway management and construction has a long history in China. Though coupled with significant political consequences, foreign capital enabled construction of many thousands of kilometers of new railway line when it was desperately needed. During later years of railway development, private capital continued to finance the construction of local railways, supporting the primary MOR rail network. In the future, this concept of efficient railway management and cost-based pricing concepts will form a basis for restructuring of the entire MOR system, resulting in the increased efficiency of the country's strategically important railway network.