China News Weekly reporter Zhou Qunfeng
Published in the 1128th issue of "China News Weekly" magazine on February 5, 2024
When it comes to the tram project in Tianshui City, Gansu Province, in past news reports, it is often introduced as "the first tram put into use in northwest my country", "provincial and municipal key projects", etc. Recently, a central government announcement pushed the project to the forefront of public opinion.
On January 15, relevant central departments reported three typical cases of rectification of formalism to reduce the burden on the grassroots, among which the Tianshui tram project attracted much attention.
According to the report, since 2018, Tianshui City has planned to invest and finance 9 billion yuan in the construction of "trambus" through the PPP (Government and Social Capital Cooperation) model. Since the first phase of the project was put into operation, it has carried only about 800,000 passengers annually and generated an income of 1.6 billion yuan. Ten thousand yuan, the annual operating cost is about 40 million yuan, and the deficit is huge. At the same time, because the water storage problem of the rivers along the line was not considered, there were potential geological risks in the first phase of the project; after the start of the second phase of the project, due to insufficient capital investment, the actual progress in the past three years was only more than half, and the progress of the second phase of the project and the improvement of Xihuang Avenue was slow. It causes traffic congestion and has a great impact on people's travel, production and life.
From a national perspective, the passenger flow report card of Tianshui trams is indeed not ideal. Data released by the Ministry of Transport shows that in 2023, Tianshui’s tram passenger volume will be 955,000, ranking third from the bottom among the 53 urban rail transit data in the country, only higher than Honghe Prefecture and Wenshan Prefecture in Yunnan.
On January 30, Hu Zhiyong, deputy mayor of Tianshui City in charge of the Housing and Urban-Rural Development Bureau, told China News Weekly that Tianshui City is currently making every effort to make serious rectifications. At the same time, the funding issue for the second phase of the Tianshui tram will be solved jointly by the province and the city, and is currently being advanced in an orderly manner.
Hu Zhiyong also revealed a timetable to China News Weekly: Tianshui Tram Phase II project strives to resume work in March this year, complete the main construction within the year, and go into operation in the third quarter of 2025 after a certain debugging period.
Tram project under PPP model
Tianshui City is located in the southeast of Gansu Province. It is known as the "Hometown of Emperor Xi" because it is considered by academic circles to be the birthplace of Fuxi, the founder of Chinese civilization. Tianshui governs 2 districts (Qinzhou District, Maiji District), 5 counties (Gangu County, etc.) and the national Tianshui Economic and Technological Development Zone. As of the end of 2022, the permanent population is 2.9544 million.
According to public reports, Tianshui’s “tramway dream” can be traced back to 2015.
According to the "Tianshui Daily" report, Tianshui is moving forward at the pace of the national PPP road. On August 17, 2015, the first government-private partnership (PPP) project signing and promotion meeting in Gansu Province was held in Lanzhou. Tianshui City Railroad The tram contract was successfully signed.
Talking about the reasons for building the tram, local media once reported that the urban terrain of Tianshui is long and narrow. The original intention of building the tram was to solve the bottleneck of Tianshui’s east-west transportation, alleviate urban traffic congestion, improve public transportation service levels, and accelerate the development of Qin The two districts of Zhouzhou and Maiji are developing in parallel with each other, which greatly improves the quality of the city.
In March 2016, Yang Weijun, then deputy secretary of the Tianshui Municipal Party Committee and Mayor, mentioned in the work report of the Tianshui Municipal Government: In 2015, projects such as the tram test section were launched, and it was proposed to accelerate the construction of a tram in 2016. Line project.
An insider close to the Tianshui Municipal Legal System told China News Weekly that at a Municipal Party Committee Standing Committee meeting before the first phase of the Tianshui tram project was established, someone expressed different views and believed that it was not necessary to build a tram in Tianshui. tram. However, the project continued smoothly later.
With the attention of local politicians, the first phase of the Tianshui tram project is progressing rapidly. In October 2016, the first phase of the project was completed. Preliminary procedures were basically completed at the end of 2017, and construction started in early 2018.
The first phase of the project is the first investment attraction project constructed using the PPP model in Tianshui City and the first urban rail transit project constructed using the PPP model in Gansu Province.
The project construction unit is Tianshui Housing and Urban-Rural Development Bureau, the government funder is Tianshui Rail Transit Investment, Construction and Operation Co., Ltd., and the social capital members are China Railway Communications and Signaling Co., Ltd. (referred to as "CRSC"), China Railway China Railway 11th Bureau Group Co., Ltd. (referred to as "China Railway 11th Bureau") and China Railway Fifth Survey and Design Institute Group Co., Ltd. (referred to as "China Railway 5th Bureau"). CRSC and China Railway No. 11 Bureau are still the construction units, while Railway No. 5 Institute is the design unit.
According to the PPP agreement, the social capital party has a 27-year franchise right for the project, including a construction period of 2 years and an operation period of 25 years.
A relevant person from CRSC once told China Business News that when Tianshui City began planning and construction of trams, many companies including CRRC had expressed strong interest in the project, and the competition was very fierce. The main reason why CRSC was able to finally win the order was its willingness to participate in PPP investment at a high proportion.
Tianyancha shows that the equity structure of Tianshui Tonghao Tramway Co., Ltd. (the operator of the Tianshui Tramway project, referred to as "Tianshui Tonghao Company") shows that, as the controlling shareholders, CRSC and China Railway 11th Bureau respectively hold shares 35.63%, Tianshui Municipal Government holds 25%, and Railway Fifth Institute holds 3.75%.
The above-mentioned CRSC person said that the Tianshui tram project is the first order China CRSC has received after entering the field of tram vehicle equipment. The most important thing is to do a good job in the project and form a demonstration. Whether it is profitable or not is not important. "According to the project PPP agreement, CRSC can gradually recover the investment cost through the supply of vehicles and later operating subsidies."
On March 24, 2019, "Changsha Evening News" reported that the CRSC Changsha Industrial Park, a subsidiary of CRSC, was put into operation in 13 months and the first tram produced in Changsha was officially launched today. Line, the first batch of 17 trains will be sent to Tianshui, Gansu.
Many rail transit experts interviewed told China News Weekly that in the process of building trams in many domestic cities, car manufacturers often play an important role in promoting them. They value the profits from selling cars after the project is operated. .
On May 1, 2020, the Tianshui Tram Demonstration Line Project (Phase I) was officially opened to traffic. Local media reported that this project is the first tram line opened in northwest my country, with a speed of 25.02 kilometers per hour, which is at the leading level in the country. The project starts from Wulipu, Qinzhou District, Tianshui City in the west and ends at Tianshui Railway Station in Maiji District in the east. There are 12 stations in total. The main line is 12.928 kilometers long. The total project investment is 2.4464 billion yuan.
"This is the first time in China that a tram has been built in a high seismic intensity area. The design team has overcome a number of seismic technical problems to ensure that the tram can perform modern functions in the thousand-year-old city." When talking about the difficulty of this phase of the project, the Fifth Railway Institute said Zhu Wenji, the general person in charge of project design.
On November 23 of the same year, the groundbreaking ceremony for the second phase of the Tianshui tram project was held. According to the official introduction, the implementation of this project is of great significance for building an integrated rail transit network with clear functional levels and covering passenger flow corridors in Tianshui urban area, further improving the city's public transportation capacity, strengthening hub connections, driving development along the lines, and facilitating citizens' travel. .
The second phase of the project consists of the section from Tianshui No. 3 Middle School to Wulipu and the section from Yangpo East Station to Yingchuan Hekou. The total length of the line is 21.597 kilometers; a total of 19 stations (1 elevated station and 18 ground stations); new parking lots 1 site; simultaneous implementation of the upgrade and renovation of 18.3 kilometers of Xihuang Avenue and 11.58 kilometers of underground comprehensive pipe corridors, as well as corresponding supporting projects such as power supply and communications. The total investment is estimated to be 6.547 billion yuan.
In May 2021, the second phase of the project began construction and is planned to be operational by the end of 2023.
The second phase of the project will continue to be constructed using the PPP model. The winning social capital bidders are CRSC Innovation Investment Co., Ltd., China Railway No. 11 Bureau, China Railway No. 5 Institute, China Railway Communications and Signal Shanghai Engineering Bureau Group Co., Ltd., and CRSC Innovation Zhejiang Construction Investment Co., Ltd. , CRSC Construction Group Co., Ltd., Beijing All-Road Communication Signal Research and Design Institute Group Co., Ltd., CRSC Rail Vehicle Co., Ltd. and other consortiums.
Subways, light rails, trams, etc. all belong to urban rail transit. At the national level, there are strict regulations on the construction of subways and light rail, but the construction of trams can be approved locally. Many rail transit experts interviewed said that Tianshui does not meet the threshold for building a subway or light rail. Building a tram in Tianshui, which has a rail transit dream, is also a realistic choice.
Cai Shaoqu, an expert in the public transportation priority expert database of the Ministry of Transport, told China News Weekly that currently, at the national level, my country has no regulations on local financial conditions and population numbers for the construction of trams. The standard recommended by the industry for construction is generally that the tram's passenger flow range after opening to traffic is 6,000 to 12,000 passengers/hour. "This passenger flow scale is highly flexible, which gives local governments a large amount of room for maneuver."
In addition, some interviewees believe that with the decentralization of approval rights, local autonomy is also increasing. Projects promoted by a city's main leaders are also more likely to be passed.
Sun Liang (pseudonym), an insider of CRSC Construction Group Co., Ltd., told China News Weekly that Tianshui’s tram project was approved by Tianshui City and had not been approved at the provincial level.
Hu Zhiyong, deputy mayor of Tianshui City in charge of the Housing and Urban-Rural Development Bureau, also told China News Weekly that the relevant procedures for the first and second phases of the Tianshui Tram were approved by Tianshui City. "This was in line with the regulatory requirements of that period. At that time, many places were subject to county-level approval, and we also went to the municipal level."
The first phase was “popular” and the second phase was “financially difficult”
It has been more than three years since the first phase of the Tianshui tram was opened to traffic, but the passenger flow has never been guaranteed. Why is this "people's livelihood project" built with a lot of money by the local government not favored by the people?
Some Tianshui citizens reported that the Tianshui trams are slower than buses and the lines deviate from the urban area. They would rather stand and squeeze into the bus.
Some netizens left a message on Tianshui Municipal Government's "Government-Citizen Interaction" saying: Our city's tram line planning still needs to be discussed and optimized. I think the tram project lines should be as close to the city as possible and work in densely populated areas. Most of Tianshui's tram lines currently in operation or planned are along Chengji Avenue Middle Road, East Road and Jiehenan Road. The passenger flow is small during off-peak periods, resulting in a waste of resources. After riding the train, some people left messages on the online platform jokingly calling it a "ghost train with no one on it."
Recently, when a reporter from "China News Weekly" took the Tianshui Tram Line 1 to experience it, he found that the whole journey passed through 12 stations, and there were only a few passengers on the train at each station. There were only about a dozen passengers in the train, and sometimes there were only a few passengers. The whole carriage seemed very empty. The route is about 13 kilometers and takes 28 minutes.
In response to comments from netizens, in April 2022, Tianshui Tonghao Company responded that before the construction of the first phase of the project started, experts from rail transit, urban planning and other industries inside and outside the province had completed the line planning and demonstration. After approval, it has now been Construction of the second phase of the project has begun. The second phase comprehensively considers all aspects of the city's future development needs, connects Qin and Mai districts, and provides more convenient travel conditions for the general public.
Sun Liang also told China News Weekly that due to geological and design issues, the operating speed of the first phase of the project has not increased. The design speed of the second phase can reach more than 60 kilometers per hour, and it has an independent right of way and no traffic lights when driving. "The second phase of the line runs in the urban area, and you can ride the entire journey of more than 20 kilometers for 2 yuan. It passes through shops and residences in the city, which is very convenient for citizens."
However, the second phase of the project, which had high hopes, was stalled due to "financial difficulties".
Since last year, many Tianshui netizens have made complaints on the "Local Leaders Message Board" of People's Daily Online. Someone asked, "Will the second phase of the Tianshui tram project continue to be constructed? If it is no longer constructed, please restore the smoothness of the roads for people to travel. The dust is flying every day, and my eyes are covered with trachoma. The roads are uneven and have very large holes." Security risks".
Someone else left a message saying that the Tianshui Tram Phase II project has been unfinished since 2022. The entire Xihuang Avenue is surrounded by iron fences and is in a mess. The road is narrow and bumpy. As the main road connecting Qinzhou Maiji District II, It is also the only way to get to Tianshui High-speed Railway Station, so the road is jammed on weekends and holidays. It is recommended to remove the road blockage first and restore normal traffic order. Do not delay for a long time, which will affect people's travel and the appearance of Tianshui City.
Tianshui Tram Co., Ltd. said that due to capital issues, project financing funds were not available, and most of the project construction had to be temporarily suspended. Previously, the company has carried out investigation and statistics on the fencing problem. All the areas that have been demolished have been demolished, and those that have been opened to traffic have been opened to temporary traffic. Because there are deep foundation pits, temporary facilities, etc. in some unfinished project areas, if the fence is removed, it will cause greater safety hazards to vehicles and pedestrians. Such fences are not yet qualified for removal.
Recently, "China News Weekly" saw Xihuang Avenue near Guanquan Farmers Market in Mapaoquan, Tianshui City. The center of the road was blocked by a high fence, leaving only two sides for vehicles to pass. The center of the road was covered with green dustproof net. There are warnings such as "There is deep foundation pit construction inside, it is strictly forbidden to approach the fence" written on the fence.
Many passers-by and shop owners along the street said that since the construction of the second phase of the tram project began, Xihuang Avenue has simply become the representative of Tianshui City’s dirty and messy roads. It is very congested and dusty during the morning and evening rush hours.
From the relevant documents released by the Tianshui Municipal Finance Bureau, we can see the local financial dilemma.
In September 2023, the Tianshui Municipal Finance Bureau released the "Report of the Tianshui Municipal People's Government on the Implementation of Tianshui City's Fiscal Budget for the First Half of 2023". When talking about the current difficulties and problems, the report pointed out that the budget revenue of government funds at the municipal level There are many short-term revenue, especially the short-term revenue from the transfer of state-owned land use rights. This directly leads to the lack of financial resources for rigid expenditures at the city level, and also affects the city's large-scale fiscal revenue to drop sharply.
Four months later, the "Report on the Implementation of the City's Fiscal Budget in 2023 and the Draft of the City-wide and Municipal-level Fiscal Budget in 2024" released by the Tianshui City Finance Bureau showed that there are some difficulties and difficulties in Tianshui City's financial operation and management that need to be studied and resolved in depth. question. The scale of city-level fiscal revenue has dropped sharply, and available fiscal resources have seriously shrunk. Affected by factors such as the economic downturn, real estate policy regulation, tax cuts and fee reductions, real estate-related income has dropped sharply. In 2023, the city-level general public budget revenue is expected to reach 1.5 billion yuan, which is a decrease compared with the same caliber in 2021 and 2022. 650 million yuan and 121 million yuan, down 30.23% and 7.46% respectively on the same basis; the tight fiscal balance of "revenues cannot meet expenditures" is increasingly aggravating, various government debt resolutions, PPP project expenditure responsibilities, urban renewal, shanty town reconstruction, municipal Rigid expenditures such as infrastructure construction are not financially guaranteed to be implemented.
Sun Liang told China News Weekly that they will be in a state of shutdown most of the time in 2023. He said that some districts and counties in Jiangsu and Zhejiang have an annual GDP of more than 300 to 400 billion yuan, but they have not even built a tram project. Tianshui's GDP is only 70 to 80 billion yuan, but they dare to start a tram project. "In addition to Tianshui, cities such as Zhangye in Gansu are also rushing to build trams, but they are not going well. Although as a construction company, I honestly think that trams, a relatively expensive project, will have a negative impact on many economies. Underdeveloped cities are not suitable.”
Cai Shaoqu said that in many cities across the country, trams are operating at a loss, but these cities have good financial conditions and will not have a situation like Tianshui. For example, in 2023, Wuhan's total general public budget revenue will reach 296.142 billion yuan, and it is fully capable of subsidizing the operation of trams to ensure orderly operations. "In contrast, Tianshui's fiscal revenue is limited and it is easy to expose problems."
Is the second phase expected to be operational in 2025?
According to the characterization of the Tianshui tram project in a report issued by the relevant central government departments, "this 'popular' project has become a 'disturbing' project that has no money to build and cannot be demolished."
Where does the project go next? On January 30, Hu Zhiyong, deputy mayor of Tianshui City in charge of the Housing and Urban-Rural Development Bureau, told China News Weekly that Tianshui City is currently making every effort to make serious rectifications. At the same time, the funding issue for the second phase of the Tianshui tram will be solved jointly by the province and the city, and is currently being advanced in an orderly manner.
He also said that the problems reported by the masses such as road congestion and travel inconvenience caused by the second phase of the project have been basically solved. "We are accelerating project construction in all aspects to avoid unfinished projects, idleness and waste in the second phase of the project."
Hu Zhiyong also revealed a timetable to China News Weekly: Tianshui Tram Phase II project strives to resume work in March this year, complete the main construction within the year, and go into operation in the third quarter of 2025 after a certain debugging period.
Recently, the State Council issued a notice requiring 12 provinces including Tianjin, Inner Mongolia, Liaoning, Jilin, Heilongjiang, Guangxi, Chongqing, Guizhou, Yunnan, Gansu, Qinghai, and Ningxia to, in principle, not build new buildings (including renovation, expansion, and purchase) in some areas. Government investment projects include the transportation field and highlight urban rail transit.
According to the "Measures for Strengthening the Management of Government Investment Projects by Classification in Key Provinces (Trial)" attached to the notice, among these 12 provinces, the total investment in projects under construction has exceeded 50%, follow-up construction funds have been secured, and construction plans will be optimized and compressed as appropriate. If the investment scale is large, the construction can in principle be continued; if the total investment of the project exceeds 50% but there are major problems, or if the total investment does not exceed 30%, the construction should be postponed or stopped.
"Currently, the investment in the second phase of the Tianshui Tramway project has exceeded 50%. After we reduce the investment plan and implement follow-up construction funds, it meets the conditions for continued construction." In response to the above regulations, relevant personnel from the Tianshui Municipal Finance Bureau once reported to "China Business News" said so.
This interviewee also talked about the specific follow-up financing ideas: First, negotiate with social capital parties, and actively raise capital for the second phase of the tram project in accordance with the idea of exchanging resources for capital, striving to be completed on March 1, 2024. Previously, about 75 million yuan was raised; the second is to connect with the consortium of social capital parties, and on the basis of the capital in place, strive to give priority to the capital of social capital parties to promote the implementation of bank loans; the third is to increase the financial budget fund guarantee and strive to At least 10 million yuan of municipal fiscal funds will be in place before the end of March 2024.
In addition to the above notice, the National Development and Reform Commission has also recently issued relevant documents to restrict the investment impulses of government and social capital.
On January 24, 2024, the National Development and Reform Commission issued the "Outline for Preparing Franchise Plans for Government-Private Cooperation Projects (2024 Edition, Draft for Comments)", which outlines the scope, implementation methods, main principles of franchising, cooperation boundaries, and franchising The basic conditions for operator selection shall be clearly stipulated. Among them, one point that attracts attention is that it clearly requires that except as representatives of government investors in projects where local governments provide investment support through capital injections, local state-owned enterprises at the same level shall not serve as joint bidders or joint bidders of PPP projects at the same level in any way. shareholder.
A rail transit expert who has participated in the review of many tram projects told China News Weekly that from 2015 to 2022, benefiting from the PPP policy dividends, many local governments have invested heavily in infrastructure projects, and some central enterprises have also entered into cooperation with them for market performance. Strengthening local cooperation was an important background for the launch of many trams at that time.
The above-mentioned experts said that for a period of time, local governments, state-owned enterprises, and private enterprises have been enthusiastic about investment, resulting in a surge in the number and investment amount of PPP projects. However, local governments built infrastructure projects beyond their own financial capacity and misjudged the passenger flow situation after completion, which paved the way for the subsequent suspension of tram construction.
The Tianshui Municipal Government has some prospects for the second phase of the tram that may be restarted. "The reason why the Tianshui tram's current passenger volume is small is that the operating route has not formed a network. After the second phase of the project is opened to traffic, it will pass through Tianshui South Station and other areas, and the passenger volume of the tram will increase significantly by then." Hu Zhiyong said. , in the next step, Tianshui will also optimize operation and management, further reduce construction costs and operating costs, and at the same time increase non-ticket income such as car body advertising.
"China News Weekly" Issue 5, 2024
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