Traveling through the sword to engage in military industry.

Issuing bonds is nothing new, but in the past they were all issued in the form of national bonds. Issuing bonds specifically for the construction of several railways is still a new thing.

"Issuing hundreds of millions of bonds every year has indeed reduced the burden a lot." Staff Officer Ye thought for a moment, "But issuing railway bonds now is a groundbreaking thing. We have never done this before. Can it be done?"

What Staff Officer Ye was worried about was that government bonds were guaranteed by the state and had always sold well, with almost every issue having been sold out in the past.

However, the amount is controlled in a year, basically within 30 billion. Considering the current domestic situation, this amount of public debt is indeed not too difficult.

However, railway bonds do not have the state guarantee that public bonds do. Of course, Staff Officer Ye can also make this type of bond have the attribute of state guarantee.

However, this kind of bond is different from the national debt, and it is inappropriate to use the state guarantee. Otherwise, once this precedent is set, it is hard to guarantee who will issue highway bonds, airport bonds, and urban construction bonds in the future. Having been involved in state affairs for more than ten years, Staff Officer Ye has learned a lot of economic knowledge and can basically be regarded as a half-economic expert among the senior officials.

This kind of thing is not difficult to deduce at all.

"In fact, if we add one condition, the bonds will be easy to sell." Ren Zhong smiled. "We only need to state in the bond issuance announcement that if the bonds are not fully redeemed at maturity, the bondholder has the right to propose converting the face value of the bonds into railway shares. We price in yuan, and the face value of the bonds is divided into three types: 100 yuan, 200 yuan, 500 yuan and 1000 yuan. Assuming that the construction funds we need are 32.5 billion yuan, then we will set the total number of shares to 32.5 billion shares. The railway company is set up by the state as the initial sponsoring shareholder. According to our budget, 40% of the funds will be invested in the railway company account. Even if the railway company bonds are eventually converted into shares, they will still be small shareholders, and the railway company will own 40% of the shares and will of course be the largest shareholder. The identity and control of the state-owned enterprise will not be changed."

When Ren Zhong expressed this idea, Staff Officer Ye's eyes lit up.

Mixed operation of railways did not just start now, but such a policy has been in place since the beginning of large-scale railway construction. However, traditionally, provincial trunk railway lines are wholly state-owned, and only provincial branch lines are used to carry out mixed operation of the company. At the beginning, a line was built in Qilu, and several large private capitals also jointly started the whole railway chain trading with a foreign steam locomotive manufacturer.

Foreign capital used steam locomotive technology and factories to invest. Originally, Ren Zhong was not optimistic about their backward technology and believed that these companies would suffer losses. However, once the iron and coal mines along the line were mined, the railway was transformed into one that mainly carried freight and supplemented by passenger transportation. They actually revitalized the business. Starting with this railway line, they earned back their investment within the second five years, allowing the consortium, which had tasted the sweetness, to begin expanding. Of course, Ren Zhong did not let them get the chance to reap the fat meat afterwards.

He put aside all the railway lines with possible mineral resources and gave the consortium some lucrative railway lines. It's not that these lines had no profit opportunities, but they obviously would only be profitable if the economy developed in the next decade and the city relied on large-scale development of passenger transport.

In this case, even if they save money in construction, they can't expect to make a profit without more than 20 years of hard work.

But no matter what, with the rise of the University of Tokyo, these local branches located in the densely populated eastern part will eventually become busy traffic arteries. According to the current extremely low construction costs, a railway can be built at only a few hundred thousand per kilometer, and they will make good money in the future by relying on passenger transport.

This is a win-win solution for activating private capital and accelerating local construction.

Ren Zhong was not afraid that these private investors would make too much money and become arrogant. The maximum price limit for railway passenger and freight transportation that he had previously advocated was unified across the country!
If the Railway Commission adjusts the maximum price after a hearing, then all subsequent railway lines must follow the price limit confirmed at the hearing. You can lower it, but you can't go higher.

This ensures that the people can truly enjoy the benefits of national development.

For example, after the development of railways, the ratio of passenger fares and transportation prices per 4 kilometers to actual income will become lower and lower. When people generally earned a few dozen yuan a month, the passenger fare might be 1 yuan per 5 kilometers, and the freight fare might be 200 yuan per ton per 300 kilometers. After the economic development, when people's wages started to reach 3 yuan or 5 yuan, the passenger fare not only did not rise with the price increase, but might even be discounted to yuan.

In this way, the people can truly enjoy the benefits of economic development and road traffic construction.

Such low transportation costs will greatly promote the mobility of the entire society.

In the past, considering the transportation costs, I might only visit relatives once a year. Now, there is no need to be so haggard about it. It is natural to visit them two or three times a year.

Staff Officer Ye cannot think of these things now, nor will he think too much about them. He is pondering Ren Zhong's idea of ​​debt-to-equity swap, and after thinking it over, it seems that there is no big problem.

The previous dynasty had already raised funds to build railways, and now it is being turned into a joint-stock company, which is basically the same idea.

As the scale of national construction grows, everyone knows that it is impossible for the country to shoulder all the infrastructure.

Even though the country’s strength is now much stronger than in the past, it is even more than ten times stronger than the best times in history.

But now that everyone has a different starting point, their ambitions and energies are also different. Everyone is aiming at the foreign powers and trying their best to catch up.

Therefore, the mainstream consciousness is to run as fast as possible.

The key is that after two five-year plans and ten years of great development, everyone increasingly agrees that this path is right, so everyone is willing to follow it.

After thinking for a while, Staff Officer Ye said, "I think there is no big problem in principle. According to Brother Ren's idea, should we set up a railway company to operate each railway, or should we set up a railway company to operate it?"

"Let's set up a Western Railway Co., Ltd. to operate it. This way, we can operate it more conveniently and it is not limited to these three railways. From my estimation, it may take a long time for these three railways to make a profit. Fortunately, if there is no loan and no interest, we will not lose money after the construction. It's just that we won't make much money in the first ten years. After all, it will take about five years to build. We can build it in sections and operate it in batches to reduce operating costs." Ren Zhong has obviously thought carefully about this job.

"In addition, we will package some high-quality lines in the future railway construction with good potential in the west and put them in this company, so that the company's operating income will be better. At least in ten years, everyone can enjoy a dividend of 3% to 5% every year. In this way, our future issuance of similar debt-for-equity swaps will not be damaged by this."

Ren Zhong has long-term considerations. The current bond interest rate is roughly between 3% and 5%. Due to good fiscal revenue relations, the repayment of government bonds has never been postponed. In the past, the interest rates of government bonds with a term of 3, 5, and 10 years ranged from 3% to 5%.

Therefore, the dividends of the railway shares must reach at least this figure, and everyone will feel that they have made a profit. Of course, if the time is expanded to more than 30 years, they will definitely make a lot of money. The book value of these three railways alone exceeds 1000 billion, which is equivalent to more than 30 times the asset expansion!
Therefore, those who are willing to choose debt-to-equity conversion will not suffer losses, and can pass it down to their family.

This is definitely a win-win situation for the country and ordinary investors.

"Okay, since Brother Ren has thought this matter through, please come up with a detailed plan and we will just prescribe the medicine according to the list." Staff Officer Ye relaxed and said with a smile.

Rather than expecting economic benefits, it is more convincing to say that these three railways are for strengthening the national defense in the west.

Being able to successfully build it with 40% of the state investment is worth it. Staff Officer Ye hopes there will be more good things like this.

Of course, since Ren Zhong came out of nowhere, Staff Officer Ye has seen too many good things like this.

As expected, Ren Zhong's suggestion was recognized and the Western Railway Co., Ltd. was quickly built. When the Western Railway construction bonds were issued, the already enthusiastic private investment suddenly became excited when people saw that they could choose the option of debt-to-equity swap. The first phase of 5 million was almost sold out on the same day, and many people who did not have time to act strongly called for the issuance of the remaining construction bonds in advance.

Although this was a bit of a waste of funds, the senior management of Western Railway Company was not stupid. They thought that locking in the money was the best option, so they issued the remaining 19.5 billion bonds in one go and completed the sales in less than a month.

With such abundant funds, there is no need to rush the 40% investment of the state, because the construction period is as long as 5 years, and the annual investment is only 6.5 million. The income from the bonds issued now is enough for 3 years of construction needs, and the state's investment funds can be delayed and injected later.

However, we must not set a bad precedent, and sufficient funds are not a bad thing. After completing the fund raising in advance and carrying out the geological survey and design, the three railways were divided into more than a dozen sections and began to be built simultaneously. Given that half a year of the construction period in the snowy area is not suitable, the main battlefield for railway construction was first placed in the surrounding areas.

However, the heavy responsibility did not let Tibet stand still. In the Shiquanhe area in western Tibet, the Dangqu-Nianting area along the Qinghai-Tibet Railway and the western Kunlun area, there are prospective resources of billions of tons of iron ore, and many of them are iron-rich ore areas. The relatively easy to mine iron ore resources amount to more than 100 million tons.

If all the steel resources needed for railway construction were to be brought in from the mainland, the transportation cost would be considerable, which would be quite unfavorable for cost control of railway construction.

Therefore, Ren Zhong suggested building iron mines and steel mills in these areas first.

If it were in the main world and time and space, Ren Zhong's idea would not be realized because the economic cost-effectiveness would be too low and it would not be cost-effective for the time being. Therefore, even in the 21st century, Tibet's steel industry would still be less than one million tons.

But now that the world of Liangjian has miniaturized nuclear power plants, we can build 50MW-100MW small-scale nuclear power plants at a relatively low cost, so that the power plants can be built near iron ore to provide sufficient energy support for the steel and metallurgical industry.

This basic requirement can be met by simply being close to a river. After recent years of research, not only have nuclear reactions been achieved on submarines, but the power generation circulating water model and the reclaimed water reuse model designed according to the inland miniaturized nuclear power plant model have greatly reduced the demand for cooling water for the nuclear power plant's steam turbines.

This makes it possible to build nuclear power plants in the mainland without any problems.

In Dangqu, there is water from Namtso Lake available, and in the Shiquanhe area in western Tibet, there is water from the Shiquanhe River for building reservoirs. In the main world, the capacity of the Shiquanhe Reservoir is as high as 1.2 million cubic meters. For two small nuclear power plants, there is no problem with cooling water.

Therefore, while the early railway foundation was being built, iron ore mining in Tibet and the construction of two steel mills and two small nuclear power plants also began simultaneously.

According to the construction plan, the track steel and carriage steel produced by these two steel mills will meet the rail needs of the entire Tibetan area. Based on the calculation of 55 tons of rails per kilometer, these three railways will require more than 37 tons of rails alone. In addition, there are a large number of tunnels and bridges, especially tunnels, which consume up to 2500 tons per kilometer. It is possible that nearly two-thirds of the railways are mainly bridges and tunnels, and the construction needs will exceed 1000 million tons of reinforcing bars and steel!

The number is so large that if all of them were transported from the mainland to the construction site, it would obviously be a considerable number.

Therefore, Ren Zhong’s solution was to build two steel plants with a total annual output of about 2 million tons in Tibet in more than two years. In this way, when steel is used on a large scale in the next three years, locally produced steel will be the main source of steel, providing about 150% of the steel supply for this huge project, which will also promote local economic development.

At the same time, it also provides relatively sufficient steel resources for the next large-scale development of Tibet.

Not only steel, but also building materials industries such as cement are now beginning to plan, using two 100MW nuclear power plants to provide energy and give priority to supporting the production of materials for this world-class huge project.

In this way, Ren Zhongwei not only solved the financing problem for this project, but also laid the foundation for supporting construction and further development of Tibet in the future.

Ren Zhong is very clear that one cannot get rich simply by building roads. As long as he takes advantage of the opportunity of road construction to release local resources to form a new industry, and then bring about a new group of service industries from this industry, the local economy will be boosted like a snowball.

Although it will not develop on the same large scale as the mainland, it is definitely much better than it is now.

Moreover, after the industrial chain is formed, once we establish good relations with neighboring countries such as Nepal and Pakistan, exports to these two places will also be a considerable market. For Tibet, a sparsely populated area, it is obvious that the road to wealth does not take too far to reach a well-off world.

Moreover, after the opening of the three major railways, the tourism industry in Tibet will be opened up, and the future development will be even more limitless.

After all, this snowy plateau is a unique landscape that is extremely rare in the world. (End of this chapter)