Attracting private capital to railway projects faces numerous difficulties and obstacles. Railway projects involve large investments and high entry barriers, making it difficult for private capital to gain decision-making power. Railways possess a degree of natural monopoly and a significant network effect, potentially leading to unfairness in network usage and access rights, such as conflicts between local governments and the railway sector. Furthermore, the pricing mechanism is not market-oriented, a profit model has not yet been established, and ticketing and fare structures remain under state control, resulting in a lack of guaranteed returns for private capital. This paper argues that the following aspects should be addressed:
1. Accelerate the separation of government and enterprise functions and establish a diversified, market-oriented railway investment and financing system.
The Ministry of Railways should actively promote the separation of government and enterprise functions, implementing categorized construction and operation. For public welfare projects, the main reliance should be on government investment and loans at all levels. For commercial lines, passenger dedicated line companies should be allowed operational autonomy, a certain degree of transportation dispatching and command, independent financial accounting, and the ability to bear their own profits and losses. This allows for market-based financing methods, attracting capital market funds and introducing social capital through project financing. For losses incurred due to social responsibility during operation, such as disaster relief and military transportation, the Ministry of Railways should provide subsidies on behalf of the state to ensure the interests of external investors.
2. Railway enterprises must strengthen scientific decision-making.
Passenger transport companies must strengthen scientific decision-making for projects, objectively evaluate construction conditions and operational efficiency, prevent predatory projects aimed at undercutting costs, ensure investors' interests, and guarantee sustainable development.
3. Implement government investment and other responsibilities.
Government investment should be prioritized and到位 (到位 means "in place" or "fully implemented") to create a platform for attracting private capital. National support policies urgently need to be implemented. National policies should support infrastructure construction through convertible bond issuance, insurance fund participation, etc., and support policies related to freight rates and taxation also need to be implemented.
4. Improve relevant laws and regulations as soon as possible.
The laws and regulations governing project financing such as BOT, TOT, and ABS are not yet perfect and require supporting "innovations" in related laws and regulations.
5. Strengthen investment services and guidance.
The government and enterprises at all levels should build an open and transparent investment information system and actively provide various information to domestic and foreign private capital.
In conclusion, innovation in railway investment and financing methods can further promote the reform of the railway investment and financing system, drive the reform of the entire railway management system, and accelerate the construction and development of China's railways.
