High-speed rail ticket prices not to be cut 'yet'
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Responding to lawyers' questions on Wednesday, the National Development and Reform Commission (NDRC) said the time is not yet right to adjust high-speed-rail ticket prices. But the NDRC said it would keep an eye on the issue and establish a pricing system at a "proper" time.
The Wuhan-Guangzhou high-speed railway took 700 million yuan (US$102.5 million) from ticket sales in the first 56 days following its launch on December 26, 2009. Ticket prices range from 490 to 780 yuan, about 3.5 times higher than ordinary train tickets. The high prices combined with the cancellation of 13 short distance trains between the two places led to a large number of customer complaints.
Lawyers from Beijing Zhongyin Law Firm presented an antitrust complaint to the NDRC and the State Administration for Industry and Commerce. They argue that even if ticket prices were cut in half, the high-speed railway would still be able to operate at a profit.
According to one of the lawyers, Dong Zhengwei, if the Wuhan-Guangzhou high-speed railway was to increase the number of passengers carried per day to 400,000, each kilometer would cost 0.252 yuan per passenger, meaning a ticket price of 269 yuan would be able to support the operation of the line. Currently each kilometer costs 0.459 yuan per passenger.
"It costs lot to carry 10,000 people. But moving up to 100,000 adds virtually nothing to the cost per passenger. The number of high-speed train services between Beijing and Tianjin, Wuhan and Guangzhou, Zhengzhou and Xi'an is being artificially kept down by the state-owned railway companies. Current services are less than one tenth of capacity. This leads to high costs and high ticket prices," Dong said.
The lawyers pressed the authorities to investigate and punish monopoly pricing, in line with the Antitrust Law. They asked the NDRC to hold a hearing on ticket prices and the number of services on the Beijing to Tianjin high speed line.
In a written response, the NDRC said high-speed rail services are still in their testing phase and "the cost of carrying out a major pricing study right now would be passed on to rail passengers in the form of yet higher ticket prices."
The lawyers remain fairly optimistic about long term prospects of a review.
"This is the first anti-trust report to be accepted and confirmed by NDRC on paper. What is more, the report targets state-owned companies. It implies that NDRC is no longer unconditionally defending high-speed rail ticket prices. In other words, the price system may be changed in the future," Dong said.
Some CPPCC members expressed opinions on the matter. The Director of Guangdong Dongfang Kunlun Law Firm, Zhu Zhengfu, said competition should be introduced. "The government should allow different enterprises to rent and operate trains. Prices should be determined by the market," Zhu said.
Li Jingxian, a member of China Democratic League, said the key was for other forms of transport to offer alternatives to high-speed rail.
