Shanghai's rail line administrator is considering having the developers of real estate projects along the lines to shoulder part of the construction cost.
Xu Zecheng, president with Shanghai Rail Transport Pearl Line (phase 2) Development Co Ltd, revealed yesterday at the ongoing forum on cooperation between public departments and private firms in Huangshan city.
The forum was jointly organized by China's Financial Ministry and International Financial Corporation under the World Bank.
Since the rail transportation helps increase prices of property along the lines, developers should contribute part of their additional profits to subsidize the rail line construction, a way to alleviate the burden on the government, Xu said in today's Oriental Morning Post.
Citing research in Hongkou and Zhabei districts, he said housing prices in areas where the rail lines will run through rise by an average 500 yuan (US$60) per square meter.
"In this sense, developers should not only take the profit from the traffic investment," he said, "but also handle part of the investment".
With the introduction of the private capital, Xu estimated the government would see its cost reduced by one-third or even half.
The investment for Shanghai's rail system already under planning will total 170 billion yuan, according to Xu.
Citing the Rail Transportation Line 1 and 2, which are already operating at the full capacities, he said income from rail operation will hardly recover the huge investment.