2014年-世界发展银行全球_Private_Capital_for_Railway_Development_8页_1mb

Private Capital for Railway Development in China

Core Content

This document explores the opportunities and mechanisms for attracting private capital to the railway development sector in China, drawing on international experiences. It outlines several strategies that can be adapted to China's context to enhance financial sustainability and reduce the burden on the public sector.

Main Views and Key Information

1. Private Capital Mechanisms

Private capital can be attracted to the railway sector through the following mechanisms:

• Private Sector Provision of Rail Assets or Services: This includes leasing rolling stock, providing maintenance services, and operating trains. Private entities can profit by offering services that reduce costs or improve efficiency for railways or shippers.
• Public Private Partnerships (PPPs): These involve collaboration between public and private entities to build or operate railways. Successful PPPs are structured to ensure value for all participants and risk is shared appropriately.
• Leveraging Commercial Value of Rail Assets: This involves using railway right-of-way for other utilities and developing real estate around stations, which can generate additional revenue.
• Financing Railway Companies: Private investors can purchase bonds or equity shares in railway companies, especially when the underlying business is profitable.

2. International Examples

• Rolling Stock Leasing: In the US, Union Pacific leases 29% of its locomotives and 45% of its freight wagons. This allows railways to spread the cost of assets over their useful life and access better financing terms.
• Wagon Operations: In Russia, private ownership of freight wagons became profitable after tariff reforms in 2003, leading to 85% of wagons being privately owned.
• Third Sector Railways: In Japan, low-density railways are operated by joint public-private entities, with the public sector subsidizing operations to make them attractive to private investors.
• Real Estate Development: In Hong Kong, MTR Corporation generates significant profits through real estate development and commercial use of station space.
• PPPs in Railway Concessions: In Brazil, Vale S.A. invests in railway concessions, paying fees to governments for long-term operation rights. In Europe, train operators benefit from public sector support in infrastructure and regulation.

3. China's Experience

• China has historically used joint ventures and local government financing for railway projects.
• The State Council's 2013 Opinion aimed to broaden the base of railway ownership, introduce new financing mechanisms, and leverage land value around stations.
• Shenhua Group, a state-owned energy company, operates several private railway lines to transport coal, demonstrating the potential for private investment in infrastructure tied to specific industries.

4. Investor Considerations

• Private investors seek a return on investment that matches the risk. They are more likely to invest in activities with clear profitability and manageable risk.
• Risks include traffic, regulation, competition, and operational safety. Investors also consider corporate governance, expropriation, and currency risk.
• The Weighted Average Cost of Capital (WACC) is a key metric for investors, representing the cost of debt and equity financing. A railway's WACC is calculated based on the proportion of debt and equity in its capital structure.

5. Recommendations for China

• Identify and Create Profitable Railway Activities: Develop markets and entities such as leasing companies and real estate developers that can generate sustainable returns.
• Establish a Favorable Policy and Legal Environment: Ensure clear, neutral, and reliable regulations that protect private investors and reduce uncertainties.
• Manage Risk Perception: Clarify tariff regulations and provide transparency to reduce perceived risks and lower the cost of capital.
• Promote Asset Sharing Opportunities: Encourage comprehensive land development around railway stations, leveraging the value of real estate and infrastructure.
• Expand PPPs in Rail Services: Leverage the strengths of both public and private sectors in logistics and passenger services to enhance efficiency and profitability.

Conclusion

By adopting successful international practices and tailoring them to China's specific context, the country can attract more private capital to its railway development. This would help reduce public sector financial exposure, increase efficiency, and support sustainable growth in the railway sector.