(Yicai Global) Jan. 10 -- China’s first privately owned highspeed railway line opened on Jan. 8, traversing southeastern Zhejiang province and signalling that the country is preparing to open up its vast railway infrastructure to private capital.

The Hangzhou-Taizhou Highspeed Railway runs 266.9 kilometers between the provincial capital Hangzhou and Taizhou, near the coast. There are around 35 trains running the route each day, servicing nine cities. Trains travel at speeds of 300 kilometers an hour.

Costing CNY44 billion (USD7 billion), the Hangtai Railway is 51 percent privately owned by a consortium under Chinese conglomerate Fosun Group. State-backed China Railway Investment holds 15 percent equity and Zhejiang Communications Investment the rest.

State-owned and private companies’ co-investment in high-speed railway projects can ease financial pressure on the government and encourage firms to introduce new business modes to improve performance, said Zeng Gang, president of the Institute of Urban Development of East China Normal University.

The Hangtai Railway was built as a form of public-private partnership called Build-Own-Operate-Transfer. The Fosun consortium has been given the right to finance, design, build, own and operate the project for 34 years, including the four years it took to build the railway line, to recoup expenses and make a profit. Once the time period expires, the project is returned to the state.

People will be watching closely to see how profitable this railway public-private partnership is, said Zeng. Usually only major arteries such as those between Beijing-Shanghai and Guangzhou-Shenzhen make money.

Editor: Kim Taylor