Diversified operation
The ministry has experienced fluctuating profits and losses in recent years, earning 2.7 billion yuan in 2009, losing 13 billion yuan in 2008, but earning 8.7 billion yuan in profit in 2007.
"It is normal for railways to loss money in the first few years as the investment in infrastructure may need at least a five-year incubation period," said a fund investment manager.
However, it is more difficult for high speed railways to earn profits due to huge investments and high expense for maintenance. In order to decrease losses, Minister Sheng Guangzu proposed diversified operations. In addition to freight and passenger transport, services including advertising, newspapers and food services should be introduced into the rail system, he said.
