China's railways

China fires railway officials for “trash” projects

Another scandal is testing investor confidence in China’s troubled railway industry, but one rail company is nevertheless pushing ahead with a $2.3 billion Shanghai IPO.
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How China used to build bridges (Bilderberg)
<div style="text-align: left;"> How China used to build bridges (Bilderberg) </div>

China has fired at least 10 railway officials over a sub-standard Rmb2.3 billion ($360 million) construction project that involved bridges filled with trash instead of concrete, and builders without any relevant experience, including one team led by a cook.

The scandal has reignited criticism of China’s railway industry, which has been troubled by safety and management problems. China’s railways ministry dismissed three senior officials after a deadly train crash that killed 35 people in east China’s Wenzhou in July. A month later, the ministry sacked its spokesman, allegedly for giving “inappropriate” answers to the media.

The railways ministry has ordered the partial demolition and reconstruction of two bridges — part of the Rmb2.3 billion project — in northeast China’s Jilin province, the official China Daily reported. China Railway No 9 Group, the main contractor for the project, and Shenyang Railways Construction Supervision Company, a construction quality watchdog, were fined to cover the reconstruction costs and were disqualified from making bids for railway contracts for a year.

The parts of the project that will be rebuilt include bridges filled with gravel, rubble and even garbage, instead of concrete.

“I wouldn’t dare to take the train once it’s finished,” said a migrant worker who helped build the bridges to Chinese media.

Nevertheless, China Railway Material Commercial is testing investor confidence and pushing ahead with a Rmb14.7 billion ($2.3 billion) IPO in Shanghai, according to a statement released on the environmental protection ministry’s website.

It plans to use the money to fund its 27 projects, the company said in a statement posted on the website of the nation’s environmental watchdog. It will use around Rmb6 billion to build new rail transport facilities to move cargo such as steel and coal. It also plans to use Rmb1.2 billion to boost road and waterway transport capacity, as well as enlarge its logistic centres in Yunnan and Hubei provinces.

The company has recently received Rmb15 billion of loans from Bank of China, according to a statement to the State-owned Assets Supervision and Administration Commission.

Other companies waiting in the pipeline include New China Life Insurance. The country’s third-biggest life insurer plans to raise $2.5 billion from a dual listing in Hong Kong and Shanghai, according to a draft prospectus posted on the website of the China Securities Regulatory Commission. The issue size is nearly half what it originally planned.

The insurer, which posted a 15% drop in net profit for 2010, was said to be targeting as much as $4 billion to replenish capital and had aimed to list by October.

The company has appointed CICC and UBS to manage the deal.

¬ Haymarket Media Limited. All rights reserved.
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