RailEnquiry

Although the Ministry of Railways (MOR) has not released its balance sheet for 2012, the financial status of regional railway bureaus suggests that an overall loss for the Ministry is inevitable. It has been disclosed that the Shanghai Railway Bureau incurred a loss of around 13 billion yuan in 2012. The losses of the Nanchang Railway Bureau and Guangzhou Railway Group were 7.9 billion yuan and 2.6 billion yuan respectively.

According to industry insiders, the slower macro-economic growth, weaker demand for bulk cargo transport, and larger investments in high-speed railways all resulted in the MOR’s loss for 2012.

As of the end of the third quarter in 2012, the MOR’s debt ratio was 61.8 percent and after-tax profit was negative 8.54 billion yuan. The recovering rail transport volume in the fourth quarter may improve the financial situation to some extent but will not be able to reverse the overall loss situation.

From 2013 to 2015, the MOR plans to invest 1.33 trillion yuan in the railway sector. The investments will be mainly funded by bank loans and bond issuance, meaning that the MOR’s debt ratio is expected to increase further.