Crew members at a regional division of CRC in Chengdu, capital of Sichuan province, take part in a rescue exercise. (Wang Zhengwei/China Daily)
The company should be divided into several firms, expert says
Mounting debts at State-owned China Railway Corp Group have sparked calls to split up the country's main railway service provider. A railway expert said on Friday the central government should divide the CRC into several regional companies with a shareholding structure to maintain a healthy growth.
Total liabilities of the CRC stood at 4.14 trillion yuan ($636.73 billion) by the first quarter of this year. The company had a deficit of 8.73 billion yuan between January and March of 2016, up 35 percent on a year-on-year basis, according to the CRC's audit report for the first quarter of 2016.
The company said in an announcement that the losses during this period were mainly caused by fast-growing road transportation and an overall decline in rail goods transportation.
Luo Renjian, with the Institute of Transport Research at the National Development and Reform Commission, said even though the CRC's debt burden was not high compared with firms in sectors such as highways, civil aviation and ports, it would be better to divide the company.
"It would effectively save cost and even make profit to divide the current CRC system into several regional companies with proper shareholding structure to optimize the country's railway service resources and networks," said Luo.
CRC declined to comment on the issue on Friday.
Eager to restore its earning ability, the CRC announced last month the creation of a number of rail logistics centers in Anhui and Shandong provinces to support transportation of household appliances and diversify its businesses, an effort to compete with airlines and private delivery companies.
As China's main railway network developer, the CRC is also responsible for investments in big-ticket projects like railway construction and the purchase of equipment including bullet and freight trains.
