BEIJING (Reuters) – China is likely to dismantle its sprawling, scandal-plagued Railways Ministry into operations and commercial arms that will be supervised by different agencies, two sources said, part of an overhaul of the bureaucracy as a new set of leaders takes charge in Beijing.
The restructuring is aimed at ending long-standing inefficiencies and addressing the ministry’s reputation for insularity and corruption, they said.
“The Railways Ministry will be demoted (in status),’’ said one of the sources. The changes are set to be approved at the annual full session of the National People’s Congress, or parliament, which begins on Tuesday. A cabinet reshuffle is expected as Xi Jinping takes over formally as president and Li Keqiang as premier.
“Part of the Ministry of Railways will be merged with a super Ministry of Transport,’’ said a second source who has leadership ties, requesting anonymity to avoid repercussions for speaking to foreign reporters. The source was referring to the operations of the railways. A state-owned enterprise will absorb the ministry’s commercial arm, which has responsibility for passenger ticketing and freight operations, the sources added.
The Railways Ministry has faced numerous problems over the past few years, including heavy debts from funding new high-speed lines, waste and fraud. The government has pledged to open the rail industry to private investment on an unprecedented scale.
“Our deep hope that the (railway) reforms become the clarion call for a new round of trade reform and a trigger for the huge potential of reforming the monopoly state sector, to create the maximum benefit for China’s future development,’’ wrote Hu Shuli, editor in chief of Caixin, a respected financial weekly.
The 21st Century Business Herald newspaper reported the ministry will likely be split into a “Railways Bureau’’ that will oversee operations and personnel, while the lucrative freight business and passenger transport would be incorporated and added to state-owned enterprises overseen by the State-owned Assets Supervision and Administration Commission, or SASAC.