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19-07-2017, 01:10 PM
An honorable member of the Coffee Shop Has Just Posted the Following:
China’s New Bridges: Rising
High, but Buried in Debt
China has built hundreds of dazzling new bridges, including the
longest and highest, but many have fostered debt and corruption.
https://www.nytimes.com/2017/06/10/w...structure.html (https://www.nytimes.com/2017/06/10/world/asia/china-bridges-infrastructure.html)
Fueled by government-backed loans and urged on by the big construction companies and officials who profit from them, many of the projects are piling up debt and breeding corruption while producing questionable transportation benefits.
For all its splendor, the Chishi Bridge, in Hunan Province, exemplifies the seamy underside of China’s infrastructure boom. Its cost, $300 million, was more than 50 percent over the budget. The project struggled with delays and a serious construction accident and was tarnished by government corruption. Since it opened in October, the bridge and the expressway it serves have been underused and buried in debt.
A study that Mr. Ansar helped write said fewer than a third of the 65 Chinese highway and rail projects he examined were “genuinely economically productive,” while the rest contributed more to debt than to transportation needs. Unless such projects are reined in, the study warned, “poorly managed infrastructure investments” could push the nation into financial crisis.
While experts often advocate infrastructure building as a path to economic development, local governments in China “went overboard” because of corruption and other financial lures, said Huang Shaoqing, an economist at Shanghai Jiaotong University.
The projects are often financed by loans from state-owned banks to companies owned by local governments, which collect tolls to repay the loans. But on many routes in less populous inland regions, tolls are not keeping pace with the costs, setting off a spiral of mounting debt and rising expenses.
The Chinese government estimated that expressways nationwide lost $47 billion in 2015, more than double the loss in 2014. In Hunan, expressways faced interest payments of $1.9 billion a year while taking in $1.3 billion in tolls, a deputy governor said in 2015.
But provincial officials say they are trapped. They cannot afford to lower tolls to attract more drivers to the Chishi Bridge and the 70-mile expressway it connects, but raising tolls would reduce traffic.
The price of crossing the bridge, about $3 and up depending on the size of the vehicle, is beyond the reach of most villagers below. That toll is on top of a higher toll for using the expressway.
“The capacity to repay loans with tolls is extremely weak, revenue cannot cover the outlays on operation and management, and we have no capacity at all to pay the interest and capital” on the construction loans, the Hunan transportation office said in April, responding to a complaint from a local official.
Thanks to government backing, the state-owned company building the bridge is unlikely to default or go bankrupt. But bridges like Chishi leave local governments and developers struggling with debt, and those who live below nonplused.
“If you don’t build roads, there can’t be prosperity,” said Huang Sanliang, a 56-year-old farmer who lives under the bridge. “But this is an expressway, not a second- or third-grade road. One of those might be better for us here.”
Click here to view the whole thread at www.sammyboy.com (https://www.sammyboy.com/showthread.php?245286-China-Underutilized-Bridges-Built-From-Toxic-Debts&goto=newpost).
China’s New Bridges: Rising
High, but Buried in Debt
China has built hundreds of dazzling new bridges, including the
longest and highest, but many have fostered debt and corruption.
https://www.nytimes.com/2017/06/10/w...structure.html (https://www.nytimes.com/2017/06/10/world/asia/china-bridges-infrastructure.html)
Fueled by government-backed loans and urged on by the big construction companies and officials who profit from them, many of the projects are piling up debt and breeding corruption while producing questionable transportation benefits.
For all its splendor, the Chishi Bridge, in Hunan Province, exemplifies the seamy underside of China’s infrastructure boom. Its cost, $300 million, was more than 50 percent over the budget. The project struggled with delays and a serious construction accident and was tarnished by government corruption. Since it opened in October, the bridge and the expressway it serves have been underused and buried in debt.
A study that Mr. Ansar helped write said fewer than a third of the 65 Chinese highway and rail projects he examined were “genuinely economically productive,” while the rest contributed more to debt than to transportation needs. Unless such projects are reined in, the study warned, “poorly managed infrastructure investments” could push the nation into financial crisis.
While experts often advocate infrastructure building as a path to economic development, local governments in China “went overboard” because of corruption and other financial lures, said Huang Shaoqing, an economist at Shanghai Jiaotong University.
The projects are often financed by loans from state-owned banks to companies owned by local governments, which collect tolls to repay the loans. But on many routes in less populous inland regions, tolls are not keeping pace with the costs, setting off a spiral of mounting debt and rising expenses.
The Chinese government estimated that expressways nationwide lost $47 billion in 2015, more than double the loss in 2014. In Hunan, expressways faced interest payments of $1.9 billion a year while taking in $1.3 billion in tolls, a deputy governor said in 2015.
But provincial officials say they are trapped. They cannot afford to lower tolls to attract more drivers to the Chishi Bridge and the 70-mile expressway it connects, but raising tolls would reduce traffic.
The price of crossing the bridge, about $3 and up depending on the size of the vehicle, is beyond the reach of most villagers below. That toll is on top of a higher toll for using the expressway.
“The capacity to repay loans with tolls is extremely weak, revenue cannot cover the outlays on operation and management, and we have no capacity at all to pay the interest and capital” on the construction loans, the Hunan transportation office said in April, responding to a complaint from a local official.
Thanks to government backing, the state-owned company building the bridge is unlikely to default or go bankrupt. But bridges like Chishi leave local governments and developers struggling with debt, and those who live below nonplused.
“If you don’t build roads, there can’t be prosperity,” said Huang Sanliang, a 56-year-old farmer who lives under the bridge. “But this is an expressway, not a second- or third-grade road. One of those might be better for us here.”
Click here to view the whole thread at www.sammyboy.com (https://www.sammyboy.com/showthread.php?245286-China-Underutilized-Bridges-Built-From-Toxic-Debts&goto=newpost).