SHANGHAI: China will invest 1.5 trillion (US$190 billion) to increase the nation's rail network to over 90,000 kilometres by 2010.

"We will invest 300 billion yuan (US$38 billion) in railway construction next year," Li Guoyong, transportation director of the National Development and Reform Commission, said Wednesday at the China Railway Financing Forum.

The investment, described by Li as "the biggest in China's history," would increase the size of China's rail network by almost 20 per cent.

The 1.5 trillion yuan (US$190 billion) investment includes 250 billion yuan (US$31.6 billion) for vehicle purchasing, over 600 billion yuan (US$76 billion) for railway lines and over 625 billion yuan (US$79 billion) for civil engineering.

China's 11th Five-Year Plan (2006-10) states that solving hardware problems, such as the network and machinery, are the core issues for the development of the nation's railways.

"The transportation turnover rate for railways will double with the completion of main trunk lines in 2010," said Long Hua, an analyst from Industrial Securities Co.

"The railway industry's boom is expected to last over 10 years."

Slow and relatively poor-quality services and busy trunk lines remain the major problems confronting China's rail industry.

A lack of services will remain a problem in 2010, but the Ministry of Railways expects this to be solved by 2015.

"We plan to set up an inter-city passenger transportation express, which will reach a speed of at least 200 kilometres per hour," said Li.