China's railway agency undertaking reforms but layoffs banned: report

Updated 2017-09-15 09:30:40 Global Times

The National Railway Administration (NRA), under China Railway Corp (CRC), the State-run railway operator, recently initiated reform of the enterprise system, financial news website caixin.com reported Thursday.

CRC emphasized that the reform process prohibits any form of layoffs, the report said.

All employees will be assigned to restructured companies, CRC said, noting their social insurance, supplementary pensions and housing funds will be transferred to the new company, without any changes to the packages.

Their working life at the railway bureau will be integrated into the new company's workforce system, the report said.

But the reform has raised doubts, with some questioning if it is just a renaming process. A source at CRC told caixin.com that there will also be more improvement to the corporate governance structure, as well as reform in the workforce, personnel and income distribution systems.

Overall, CRC aims to enhance the supply-side structural reform and better the State-owned capital supervision system, according to the report.

In early September, CRC was reported to be vigorously pursuing reform of the railway enterprise system while adjusting the reform plan and schedule. The reform of the 18 railway bureaus' enterprise systems is scheduled to be completed by the end of November, the report added.

In 2018, the NRA will operate in the new mechanism.

The railway workforce consists of 2.1 million full-time employees and hundreds of thousands of contractors, and years of management working in isolated and deep-rooted personnel systems have made the reform more difficult.

The large-scale workforce reform involves a considerable range of issues of social stability, becoming one of the core issues to be resolved through coordination, according to the report.

The central authorities have ordered the CRC to deepen reform of the railway system while separating the government functions from the enterprise management. CRC is expected to improve its transformation into enterprises and adopt a market-oriented mechanism, it said.

In the first half of 2017, CRC's revenue stood at 469.94 billion yuan (.7 billion), according to the company's statement.

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