Recent reports have said since the railway ministry is the only one among the four monopoly industries -- which also include telecommunications, electricity and civil aviation -- that has not undergone market-oriented reform in China, severe changes would face the railway ministry early next year. Some reports said it would be divided into four departments based on their functions and relations.

Fu Zhihuan, the railways minister, said there is absolutely no plan to dissolve the ministry.

"Railway transportation plays an extremely important role in our country's communication systems, so no decision on railway reform comes easy," Fu said at a news conference called by the Information Office at the State Council.

Unlike the three other monopoly industries, which encourage industry competition by forming large-scale companies, Fu said China's limited railway sources hinder similar actions, and market factors have to be put on hold in many cases.

"Each year, we carry billions of passengers back home for family reunions during Spring Festival without considering operation costs. We also allocated many transportation tasks, which are destined to lose money," Fu said. He added that under normal market circumstances nobody would take on the money-losing business.

Fu and his colleagues have researched many railway reform examples in the world, but found no fresh examples suitable for China's conditions.

"Britain had successfully reformed its system, but recent fatal accidents showed its railway reform in past decades was far from successful," Fu said. He used Britain as an example to warn that patience and caution are necessary in railway reform.

But even with caution, Fu stressed that railway reform has never been stopped.

The railway ministry has successfully separated income-tabulation from passenger and cargo transportation and fired some service companies over the past few years.

"All those reforms were carried out step by step, and it lays a firm foundation for the industry's future development," Fu said.

On the issue of the Beijing-Shanghai high-speed railway, Fu said it is still under discussion on which kind of technologies it will adopt.

"But one thing I can tell you is that the new railway is necessary. The Beijing-Shanghai railway has reached its maximum capacity so far, and we need the new railways to share in the pressure," Fu said.

When asked about the perspective of China Railcom, a subordinate company under the railway ministry, Fu said he is confident about its future.

(China Daily October 19, 2002)