China Focus: Light at the end of the tunnel for Beijing-Shanghai high-speed link

The financial situation of the high-speed rail link between Beijing and Shanghai is improving, with profits expected for the first time this year.

About 30 billion yuan (5 billion U.S. dollars) of tickets were sold last year, Cai Qinghua, former chairman of the Beijing-Shanghai High-speed Railway Company Ltd. told Xinhua this week.

The company is yet to release official financial results for 2014, but stakeholders in the 1,318 km line look set to rake in some 1.2 billion yuan in profits this year, following continual losses since its opening in June, 2011.

"We originally planned to achieve a financial balance in five years and recoup our investment in another 14," said Cai.

The financial situation of other major railways in China remains obscure, but it is widely acknowledged that making profits from pure passenger traffic is difficult for high-speed rail operators. The China Rail Corporation (CRC) manages the world's largest high-speed rail network and lost 5.4 billion yuan in the first half of 2014. The company has 3.4 trillion yuan of liabilities.

The Beijing-Shanghai profits should ease the predicament of the CRC, which runs the transport business along the route.

A high-speed link between the political center of Beijing and the financial hub of Shanghai was first proposed in 1990 but it was another 18 years before the project finally broke ground, around the same as the first high-speed railway (Beijing-Tianjin) opened for business.

"Construction and management of high-speed systems was standardized during the work on the Beijing-Shanghai route, when Chinese rail technology caught up with the rest of the world," said Cai.

GOING PLACES

"Behind the financial improvements are rapidly increasing passenger numbers," said Sun Zhang of Tongji University, but that's not how it has always been.

An accident that killed 40 people in 2011 brought a huge amount of unwelcome international media attention to the project and greatly dampened the enthusiasm of the travelling public. A spate of fanciful and fantastic online rumors spread spurious nonsense that daunted some potential travellers.

Passengers have ultimately been won over by the comfort, convenience and relatively low prices that high-speed trains offer. More than 100 million trips were made on the Beijing-Shanghai line last year, up 27 percent, about an eighth of all bullet train trips in China. Average daily trips on the route rose to some 290,000 last year from 132,000 in 2011.

The World Bank, which has provided loans to six of China's railway projects, expects traffic to continue its rapid growth over the coming two decades.

ON THE RIGHT TRACK

The Beijing-Shanghai line runs through China's most economically vibrant region and connects the vast city clusters surrounding the metropolises. The trip between central Beijing and the heart of Shanghai takes about five hours, which compares very favorably with the door-to-door time for flights.

Nine world heritage sites and some well known tourist attractions are on the line with the influx of passengers boosting tourism revenues.

"The railway helps the flow of people and goods along the coast and integrates the 24 cities along the route," said Xu Guangjian of Renmin University. Endi