China Railway Group'S 2020: Non Transportation Business Income Will Reach A New High, And The Investment Amount Will Be Less Than 800 Billion For The First Time

On the first working day of 2021, January 4, China National Railway Group Co., Ltd. held an annual working meeting in Beijing. At the meeting, Lu Dongfu, chairman and Secretary of the Party group of the State Railway Group, lamented that it was not easy to obtain achievements in that year.

According to Lu Dongfu, in 2020, China's railways will complete investment in fixed assets of 781.9 billion yuan, 4933 kilometers of new lines will be put into operation, and 20 new projects will be started. The total operating revenue of the state railway was 1134.4 billion yuan, with a cargo delivery volume of 3.58 billion tons, a year-on-year increase of 141 million tons, an increase of 4.1%, and a passenger volume of 2.16 billion people.

The 21st century economic reporter noted that although Lu Dongfu said that the annual targets had been fully achieved, some data were not as expected compared with the targets set by the State Railway Group in January 2020. But because of the huge impact on the main transport industry, it has inspired the power of the State Railway Group to tap the potential of non transportation business.

In 2020, the revenue of non transportation business will reach 484.3 billion yuan, a record high in the past years. "The income of the main transport industry has a ceiling, and more income should come from the growth of non transportation business," a railway expert, who did not want to be named, told the 21st century economic report that the epidemic is both a danger and an opportunity.

The peak of railway construction has passed

According to the data disclosed by the State Railway Group, in 2020, a number of new lines such as Beijing Xiong intercity railway, Yinxi high-speed railway, Zhengzhou Taiyuan high-speed railway, Lianzhen high-speed railway, Yantong high-speed railway, Shanghai Suzhou Nantong railway, geku railway, Dalin railway, etc., will be put into operation smoothly, with a total mileage of 4933 km. The scale and quality of the national railway network will be significantly improved, and the "eight vertical and eight horizontal" high-speed railway network will be densified.

In 2020, the fixed assets investment of national railways will reach 781.9 billion yuan, an increase of 71.9 billion yuan compared with the plan at the beginning of the year, of which the capital construction investment will be more than 555 billion yuan, exceeding the level of 2019; the construction of ya'an-linzhi section of Sichuan Tibet railway will be officially started on November 8; 20 new projects will be started in the whole year.

However, the reporter also noted that the investment in fixed assets of the railway was the least since 2014 and was less than 800 billion yuan for the first time. In 2021, the key construction projects of State Railway Group are Sichuan Tibet railway project, new land sea channel in the west, high-speed railway along the Yangtze River, and Beijing Tianjin Hebei intercity railway network. In 2021, the planned mileage of the State Railway Group is only 3700 km.

Lu Dongfu said the railway construction management level will be improved. In combination with the formulation and implementation of the "14th five year plan" railway network development plan, scientifically and reasonably determine the project scale standard, strengthen the input-output analysis and debt risk prevention and control, standardize the investment plan and construction fund management, and improve the efficiency of railway investment.

Some railway experts told reporters that this means that the era of rapid railway construction in the past six years has come to an end, and the railway will enter a new period of intensive cultivation.

Significant growth in freight and non transport business

The epidemic has a huge impact on the entire transportation industry. As the largest means of transportation, the railway operation is the first to bear the impact. According to the data of the State Railway Group, in 2020, the number of passengers sent by the national railway was only 2.16 billion, while in 2019, the number of passengers sent by the railway reached 3.57 billion, a sharp drop of 39% year-on-year.

The good thing is that the freight is powerful. The national railway freight volume reached 3.58 billion tons, with a year-on-year increase of 141 million tons, an increase of 4.1%, including 458 million tons of containers, a year-on-year increase of 37%, and 44000 tons of high-speed rail express transportation, with a year-on-year increase of 40%. Lu Dongfu pointed out that the proportion of railway freight volume in the total freight volume of the whole society will increase from 7.7% in 2016 to 9.9% in 2020, and the adjustment of transportation structure has achieved remarkable results.

Relevant people from the railway department told reporters that the State Railway Group will give full play to the role of freight dedicated lines such as Daqin, Haoji and Wari, increase efforts to "transit railway", optimize the operation structure of passenger and freight trains on busy trunk lines, and ensure the transportation of key materials. "The average daily loading of the national railway reached 161000 vehicles, the best level in history."

It is worth mentioning that the counter trend growth of China Europe trains has also brought a bright color to railway freight transport. According to Lu Dongfu, 12400 trains and 1135000 TEUs will be operated in 2020, up 50% and 56% respectively year-on-year, and the comprehensive heavy container rate will reach 98.4%. For the first time, the annual number of operating banks exceeded 10000 trains, and the number of operating banks in a single month was more than 1000.

The reporter noted that in 2020, the total transportation revenue of the State Railway Group is only 650.1 billion yuan, but the non transportation business income is as high as 484.3 billion yuan, which is not only a historical high, but also an increase of 122 billion yuan compared with 362.3 billion yuan in 2019. Looking at the revenue data of China Railway Group in the past few years, the non transportation business income from 2015 to 2018 was 333.5 billion yuan, 314.6 billion yuan, 284.1 billion yuan and 352.2 billion yuan respectively. However, the revenue of the main transport industry has increased by more than 10% for several consecutive years. In 2018, the total transportation revenue reached 772 billion yuan, a record high, and in 2019 it reached 818 billion yuan.

It can be seen that the non transportation business income has not increased significantly when the main transportation industry income is advancing by leaps and bounds. However, under the impact of the epidemic, the income of the main transportation industry has been greatly reduced, which has given the opportunity for the development of non transportation business. The railway experts, who did not want to be named, explained to reporters that the State Railway Group has a large number of hotel, tourism, logistics and Internet businesses, which are unified into non transportation businesses. China Railway Research Institute, China Railway Economic Planning Research Institute and railway media group are also assets of the State Railway group, and their operating income is also included in the non transportation business income.

In recent years, Lu Dongfu and State Railway Group have been increasing the strength of railway asset management and development, not only speeding up the pace of railway asset securitization, but also accelerating the implementation of land development projects, and actively cultivating new formats of industrial chain, such as the establishment of some mixed reform companies, trying new businesses such as EMU WiFi, high-speed rail freight, Internet ordering and high-speed rail + shared car.

Now when the epidemic comes, the previous investment has paid off. "If the main transport industry can't find growth, we should use our brains in the non transportation business income," a railway source told reporters. This year, the railway system is tightening its belt. It is not only necessary to reduce expenditure, but also to find ways to increase revenue, which also makes them add a lot of new business directions.

A railway expert, who did not want to be named, told the 21st century economic report that the peak period of railway construction has passed. In addition, the railway freight rate is controlled by the state, so it is unrealistic to rely on transportation revenue to bring about a substantial increase. "The income of the main transport industry has a ceiling, and more income should come from the growth of non transportation business". The expert believes that the epidemic is both a danger and an opportunity, and can urge the national railway collection The group has stepped out of the comfort zone of the main transport industry and entered into a broader competitive market and a source of higher demand for growth.

Six reforms release reform dividends

Lu Dongfu introduced the progress of state railway enterprise reform in 2020. He said that last year, the implementation plan for the three-year reform of state railway enterprises was formulated, and the corporate governance structure of the headquarters of the State Railway Group was established and improved, and external directors were gradually sent to the affiliated enterprises to promote the standardized operation of the board of directors. Formulate and implement the power list of State Railway Group and the negative list of railway administration group company, and further straighten out the management relationship between two levels of legal person. The system Atlas of National Railway Group was compiled, and the filing and review system of normative documents of affiliated enterprises was established.

At the same time, we accelerated the reform of the joint-stock system of state-owned railway enterprises. Beijing Shanghai high-speed railway company and Tieke rail company were successfully listed. Daqin company completed the issuance of convertible bonds. The listing audit of China Railway special cargo company and Jinying heavy industry company was basically completed. Guangzhou Shenzhen railway completed the delisting of overseas markets and formed a domestic capital operation scheme. The national railway asset securitization rate increased from 1.3% to 5.4%.

In terms of deepening the reform of railway investment and financing system, the proportion of local government and enterprise capital in railway infrastructure investment will increase to 59% in 2020. Implement the central decision-making and deployment, control the Beijing Tianjin Hebei intercity railway company, and establish the Yangtze River Coastal Railway Group Co., Ltd. The reorganization and integration of 47 railway companies has improved the capital structure of the joint venture railway.

In addition, we will carry out the reform of the freight car division and carry out the pilot reform of the integrated management of power centralized locomotives and passenger cars. By reforming the system of locomotive and rolling stock repair, the failure rates of EMUs, locomotives, passenger cars and freight cars decreased by 9.4%, 8.9%, 10.3% and 6.5% respectively over the same period of last year.

Lu Dongfu said that in 2021, the State Railway Group will continue to implement the three-year action plan for the reform of state-owned railway enterprises. We should strengthen the construction of governance system and governance capacity of state-owned railway enterprises, and optimize and improve the governance mechanism of state-owned iron enterprises. We should deepen management reform and mechanism reform, steadily adjust the layout of stations and depots, solidly promote the integrated reform of comprehensive maintenance of high-speed railway, consolidate and expand the reform achievements of EMU and locomotive repair system, steadily and orderly promote the pilot work of locomotive and vehicle integrated management reform, and promote the reform of Substation repair program and system. We should deepen the reform of operation mode, pay more attention to the equity management of high-quality assets, orderly promote the listing of enterprises such as China Railway special cargo company and Jinying Heavy Industry Co., Ltd., carry out the research on the stock reform and listing scheme of enterprises such as design group, promote the refinancing of existing listed companies, accelerate the implementation of road and land equity structure adjustment of railway companies, and promote the concentration of national railway capital to road network trunk lines. We will promote the restructuring of joint venture railway companies and implement the pilot program of debt to equity swap for joint venture railways.

Lu Dongfu also pointed out that "three major measures" (freight incremental action, passenger transport quality improvement plan and Fuxing brand strategy) should be implemented in 2021 to further promote "six changes" (transportation organization, management, mechanism, transportation structure, operation mode reform and supply side structural reform), so as to release reform dividends.

First, deepen the reform of transportation organization, scientifically adjust the train operation scheme of the East high-speed rail network, and release the freight capacity of busy trunk lines of the general railway. To meet the demand of freight volume, we should speed up the implementation of short and fast projects and break through the capacity blocking point.

Second, deepen management reform and release dividends of advanced technology and equipment. Firmly realize the separation of maintenance and use of Public Works overhaul and technical transformation projects, and promote the reform of substation repair process and repair system combined with unmanned transformation.

Third, deepen the mechanism reform and release the dividend of the new system. The layout of stations and depots should be adjusted steadily, the guiding opinions on the organization and staffing of stations and depots should be formulated, the management personnel structure of stations and depots should be optimized, and the management forces of production workshops and operation sites should be strengthened.

Fourth, deepen the structural reform of the supply side of railway transportation and release market-oriented operation dividends. It is necessary to carry out freight incremental action, optimize railway freight distribution, strengthen long-distance bulk cargo transportation organization, make good use of freight channel capacity, stabilize coal transportation volume; strengthen headquarters marketing function, carry out headquarters cooperation with key industrial enterprises such as coal and grain to stabilize large passenger traffic volume. In depth implementation of passenger transport quality improvement plan, the use of passenger transport big data, the precise implementation of "one map a day"; the construction and improvement of 12306 science and technology innovation center, the construction of passenger transport combined transport information platform; the steady expansion of the service scope of Internet ordering and other services, exploration of insensible access station, intelligent security inspection, silent car compartment and other service measures, to ensure the offline services of the elderly and off-line people. We will further implement the brand strategy of Fuxing, deepen the series development and industrial application of Fuxing EMUs, optimize the operation structure of Fuxing, expand the operation coverage of Fuxing, improve the operation quality and create a service brand.

Fifth, deepen the reform of transportation structure and release the dividend of railway multimodal transport. We will vigorously develop container multimodal transport, encourage enterprises to set up multimodal transport companies in the form of joint ventures and cooperation, so as to further enhance the volume of multimodal transport. We will speed up the layout of high-speed rail containers and expand the benefits of railway express transportation. Promote the development of 95306 website function to meet the "one-stop" service needs of customers.

Sixth, deepen the reform of operation mode and release the dividend of resource policy. We should promote the reform and listing of relevant enterprises in an orderly manner, promote the refinancing of existing listed companies, give full play to the advantages of railway market and resources, and connect the railway market and industrial chain by means of mixed reform, joint venture and cooperation, and promote the development and growth of diversified operation.

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