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CSR receives nearly 6 bln yuan ministry payment

0 Comment(s)Print E-mail Xinhua, November 1, 2011
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CSR Corp. Ltd., China's biggest train manufacturer, on Tuesday received payment of trade receivables of nearly 6 billion yuan (923 million U.S. dollars) from the Ministry of Railways, said the company Tuesday.

The company is expected to receive most of the total account of receivables in November and December as the ministry routinely pays in the fourth quarter, said an official of the company who declined to be named.

Chairman of the CSR Board Zhao Xiaogang said he was fully confident of the future of China's railway development as the government did not change its mid and long-term plans for the railway network that was approved by the State Council in 2004.

According to the plan, which was revised in 2008, the total length of the country's railways is expected to reach 16,000 km by 2020.

Zhao attributed the ministry's weak payment capacity to the sluggish global economic environment.

Chinese authorities have agreed to take steps to secure financial support for major cash-strapped railway projects in the country's latest move to help the crippled sector.

The Ministry of Railways will get more than 200 billion yuan of financial support to ensure payment and improve liquidity, according to sources with the ministry.

The latest quarterly statement of CSR showed that the company's net profits gained only 9.67 percent year-on-year to reach 773 million yuan, compared with an increase of 85.08 percent, or 2.04 billion yuan, in the first half of this year.

The lackluster report followed the Chinese government's decision to slash train services on high-speed rail links -- including the flagship Beijing-Shanghai line -- over safety concerns after a train accident near the eastern city of Wenzhou on July 23 killed 40 people and injured 210.

CSR manufactured the trains involved in the accident.

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