Facing expanding losses, the Ministry of Railways is unlikely to emerge from its debt-saddled predicament any time soon, but since it is "too big to fail," debt payback will not be a problem, insiders told the Global Times Wednesday.
For 2012, the Ministry of Railways is expected to post increasing losses, reflecting the bigger losses reported by local railway bureaus for the last year: Shanghai's 13 billion yuan ($2.1 billion), Nanchang's 7.9 billion yuan and Guangzhou's 2.6 billion yuan, according to a report by the Guangzhou-based 21st Century Business Herald Wednesday, citing unnamed sources with direct knowledge of the matter.
The local agencies refused to comment on this issue when contacted by the Global Times.
An insider told the Global Times on condition of anonymity that debt payment plus interest is a big burden for the ministry, and "for 2012, the ministry had to pay more than 20 billion yuan in interest."
According to a financial report posted by the ministry in late October, its losses during the first three quarters of 2012 amounted to 8.54 billion yuan, following losses of 31 million yuan in 2011 and 15 million yuan in 2010.
And its debt had reached 2.66 trillion yuan by the end of September 2012, giving it a debt-asset ratio of 62 percent.
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