Guangdong faces massive bill for transport infrastructure

Guangdong's three-year plan to spend US$94.66 billion to expand roads, rail, ports and airports in the Pearl River Delta has raised concerns that the province will have trouble paying its huge infrastructure bill, reported the South China Morning Post.

Last year, the government allocated $46.53 billion for railways, $38.89 billion for expressways, $4.86 billion for airports and $4.37 billion on ports, said Jerry Zou Yu, director of Beijing Huaxinjie Investment Consulting, a Chinese government-owned consultancy.

"The problem with the Pearl River Delta's infrastructure is it's inadequate and incomplete. The construction of transport hubs is lagging, transport systems are not well integrated and transport management is imperfect," said Yu at the South China Transport Infrastructure Developments conference in Shenzhen this week.

Between 2009 and 2012, $4.86 billion would be spent to expand airports in Guangzhou, Shenzhen and Huizhou, he said. The government aimed to increase the length of the province's expressways from 2,100 km at the end of 2008 to 3,000 km in 2012, and 3,500 km by 2020, he added.

As for ports in the Pearl River Delta, Guangdong plans to increase annual cargo tonnage from 800 million tonnes in 2008 to 900 million tonnes in 2012, while the annual container throughput is to grow from 39 million TEUs to 47 million TEUs.

"Given the rapid growth of ports in the Pearl River Delta, they're well on their way to meeting this target," said Yu.

"Guangdong's infrastructure investment is very big, and cannot rely solely on government and bank financing. It is of urgent importance to open multiple financing channels, but this is a complex challenge. The process will take time. The government should offer more policies to encourage private investment in infrastructure.

Monopolies must be broken and the investor base must be diversified," Yu added.

The Ministry of Railways was a monopoly, but liberalising the mainland's railway sector would be a complicated and difficult process, he explained. Further down the road, the Guangdong government has even more ambitious infrastructure plans.

By 2030, an intercity light railway in the Pearl River Delta would be completed, connecting cities including Guangzhou, Dongguan, Shenzhen, Foshan, Zhaoqing and Zhongshan, and spanning 1,890 km, Yu said. From 2011 to 2015, 36 urban metro rail lines with a total length of 1,231.37 km would be built, Yu added.

"The huge infrastructure build-up in Guangdong should not be a competitive threat to Hong Kong. Hongkongers should not wish Guangdong and the mainland to be weak so that Hong Kong can remain strong. Hong Kong's prosperity cannot depend on the mainland's lack of prosperity," said Dennis Li, director and co-founder of Metro Solutions, a Hong Kong transport consultancy.

"If Hong Kong doesn't link up with the mainland, Hong Kong has no hope," he said.
(Source:www.cargonewsasia.com)