The Studies On The Debt Highway Construction In Hubei Province

Since the highway constructing policy of constructing with loans and repaying with charges was applied to China in 1984, highway construction in China has entered into a rapidly developing stage. Highways with charges can be classified into two kinds: charging highways on the basis of commercial operating and highways on the basis of borrowing-repaying. Among the financial structural of newly constructed highways, the loans from banks play a key role. The policy of charging highway, on the one hand, provides an essential capital resource for construction, it leads to an increasing loan burden on the other hand. So, how to make full use of the policy of constructing with loans and repaying with charges to develop the highway system and avoid the risks of financial structural has become a focus in many research programs.This article is a part of the research program sponsored by the transportation office of Hubei Province. Holding the principle of integrating theory into practices, the article studied some issues derived from the debt structural in highway construction, and the aim is to analyze the safety level of financial structural, the feasibility of the level of debt and the upper limit of the level of debt and etc.. On this basis, the article tried to confine the problems arose from the highway construction in Hubei Province and feasible debt structural and scale. The policy implication is to control the debt risks and promote the construction of highway in Hubei Province into a orderly and healthy path which can do good to the province's economy.First, this article discussed the present situation and troubles confronted in the highway construction of Hubei Province. With consideration that the highway construction and debt increase are tightly tied with the macroeconomic environment, the article predicted the province's economic situation from the following four aspects: GNP, the total amount of products, the amount of motor vehicles and the population. We find that in Hubei Province the highway system is still a bottle-neck for economic development and the construction of the highway system should be promoted. This article also made a comparative studyof financial performances between the two patterns of highway construction: charging highways on the basis of commercial operating and highways on the basis of borrowing-repaying. We find there are some problems such as conflicts between the demand and construction of highways, the input and output in the construction and the concentration and de-concentration in the management system of the highway.In order to examine the debt situation of highway construction in more detail, this article analyzes the reasonable level of debts on highway construction with its own separate ratios system for charging highways on the basis of commercial operating and highways on the basis of borrowing-repaying. Moreover, this article computes and analyzes the ratios under the two systems from the point of total and typical cases. So we can conclude that in Hubei Province the ability of repaying debts of charging highways on the basis of commercial operating is surplus; the same ability of highways on the basis of borrowing-repaying is poorer because of diffluence of vehicles.In order to control the level of loans timely and decrease the debt risk, this article reckons the extent of debts of highway construction from 2003-2010 in Hubei Province. On this basis and with combination of The Tenth Five and The Eleventh Five Plan, we predict the revenues and expenses of traffic charges and summarize its annual level of traffic charges and the extent of debts in the next seven years.Finally, this article proposes some measures to deal with the highway construction's debts in Hubei Province. In order to handle the questions and avoid the debt risk, we will take three kinds of measures; that is, (l)In order to improve the ability of repayment of principals and interests, increase revenues and cut off expenditures;(2)Transplant the debts to alleviate the pressure of rep...