Provincial Toll Ways Deeply in Debt
(Beijing) – Most toll ways in 29 provinces across China are badly in debt after failing to earn back the money they cost to build, according to data compiled by Caixin.
As of 2010, outstanding loans for toll way construction in 29 provinces totaled almost 2.2 trillion yuan, according to toll way management reports. Of that amount, 1.95 trillion yuan, or 89 percent, was provided by banks, putting financial institutions at risk if local governments fail to pay up.
Guangdong had the most toll-related debt of any province, with an outstanding loan of 227 billion yuan. Eight other provinces each had more than 100 billion yuan outstanding.
The reports also reveal that the majority of tolls went to repaying debts, leaving little money to cover expenses like road maintenance.
In some provinces, the amount of toll money collected isn't enough to service the debt incurred to build the road. Guangdong, for instance, collected 789 million yuan in secondary road tolls and paid 770 million yuan in debt service for its roads last year. That leaves 19 million yuan to help cover the province's other 8.4 billion yuan worth of outstanding loans in road construction. In 2005, Jilin province collected 588 billion yuan in toll way revenues, which amounted to less than half of its debt service that year.
Provincial governments often take out new loans to service old ones. According to this year's audit report of local government debts, more than half of government loans in toll way constructions were repaid using fresh loans in 2010.
- MOST POPULAR