China's highway construction is facing unprecedented financial pressure

There is a capital chain break risk in highway construction, and some provinces have no funds to pay for construction companies for two to three consecutive months, and individual projects are in the state of suspension and semi-cessation. The progress of the project will be greatly affected throughout the year. It is expected that the rate of capital in place will be 25 percentage points lower than last year, and the actual volume of work completed will be reduced by about 20% from the plan.

On October 17, the Ministry of Transport announced the economic operation of the transportation industry in the first three quarters of this year. The data shows that in the first three quarters, the volume of passenger and cargo traffic in China's transportation industry grew rapidly. However, the transportation security situation is severe, transportation funds are tight, and highway construction is facing unprecedented financial pressure.

The decline in the growth rate of foreign trade throughput led to a downturn in the shipping market and the contradiction in the oversupply of transport capacity. In the first three quarters of the year, the transportation of passengers and cargo by highways, waterways, and civil aviation in China maintained a relatively rapid growth. The number of road passengers was 24.3 billion, an increase of 7.6% year-on-year; the number of waterway passengers was 181.83 million, an increase of 9.6% year-on-year; passenger traffic is expected to increase by approximately 8.6%. The road freight volume was 20.5 billion tons, an increase of 14.9% year-on-year; the waterway cargo volume was 3.12 billion tons, an increase of 15.8% year-on-year.

In the first three quarters of the year, port production was generally at a high level. Ports above designated size achieved a total cargo throughput of 6.76 billion tons, a year-on-year increase of 13.5%, which reflected rapid growth in the first quarter, slower growth in the second quarter and slight recovery in the third quarter. Completion of foreign trade cargo throughput was 2.04 billion tons, an increase of 10.3%, and the growth rate of foreign trade throughput fell back compared with last year. The container throughput was 121 million TEUs, an increase of 12.6%.

The overall shipping market was depressed, and the competition pressure of shipping companies was gradually increasing. Since the beginning of this year, the contradiction between shipping capacity oversupply and demand has been outstanding. On the one hand, due to the economic situation at home and abroad, the transportation demand has been weakened. On the other hand, shipping market capacity has been excessively fast, and a large number of ship orders in the early period have caused the new ship to continue in the next two years. Delivery, shipbuilding by large cargo owners at home and abroad further exacerbated excess capacity.

Major Road Traffic Safety Accidents Are Frequent Frequently Since the beginning of this year, the road transportation safety situation has been severe. In July, the “7.22” special sleeper bus burning accident in Xinyang, Henan Province, the “7.4” major road traffic accident in Hubei Xiantao, and the collapse of four bridges occurred, and the security situation was severe.

At the same time, accidents in the construction engineering field also showed multiple trends. In the first three quarters of the year, there were 59 production safety accidents and 104 deaths in the national transportation and construction engineering sector, up by 43.9% and 30.0% year-on-year, of which 14 accidents and 55 deaths occurred in 3 to 9 people who died, respectively. 40% and 41%. The lack of management of the construction site and personnel irregularities or misoperation are the main causes of the accident.

The risk of fractures in the construction capital chain emerged and the capital shortage in the fourth quarter will intensify. Since the beginning of this year, infrastructure investment and financing such as highways have faced certain problems, and funding has been generally difficult. As a result, the growth rate of investment in fixed assets has continued to slow, and investment in highways and water transportation has been “1. Slowly."

In the first three quarters, investment in highway and water transportation fixed assets completed 999.1 billion yuan, an increase of 14.7% year-on-year, an increase of 0.6 percentage points from the same period of last year and a slowdown of 0.8 percentage points from the first half of the year. Among them, the investment in highway construction was 882.4 billion yuan, a year-on-year increase of 12.9%, and the growth rate was 4.6 percentage points lower than that of the same period of last year. The completion of the inland waterway construction investment was 12.9 billion yuan, a year-on-year increase of 49.5%.

According to a survey conducted by the Ministry of Transport, there is a risk of the capital chain breaking down in the highway construction. Some provinces have not paid for the construction companies for two to three months in a row, and individual projects are in suspension and semi-stopping. Affected by the low level of funds in place, the project schedule for this year will be greatly affected. It is expected that the annual fund availability rate may drop by 25 percentage points from the previous year, and the actual completion of the project volume may decrease by about 20% from the plan.

It is predicted that the tight funding of transportation construction in the fourth quarter will be further aggravated and unprecedented pressure will be placed on highway construction. In order to ensure the smooth operation of the industry, the Ministry of Transport will reasonably control the scale of construction and grasp the rhythm, and control the scale of projects under construction, with pressure to maintain.