high-speed train near Beijing

China rail minister sidelined amid corruption allegations

China's plans for a vast railway expansion could slow after the minister in charge came under disciplinary investigation and the official sent to sort out his ministry warned against corruption in project bids.

With so much of China's economy dependent on its transport infrastructure, the fall of Minister of Railways Liu Zhijun could delay projects, hurt rail companies and stir worries about graft besetting China's torrent of government-run spending.

Sheng Guangzu, the chief of China's customs authority, was sent to oversee the ministry after Liu came under investigation for "serious disciplinary violations".

The government has not said what Liu is accused of, and he has not been formally dismissed as minister or charged. But "disciplinary violations" usually means corruption and abuses of power that can lead to criminal charges.

Sheng urged rail officials to keep up the pace of projects and not to meddle with tenders from companies seeking a slice of Beijing's planned investment of between 3.6 trillion and 4 trillion yuan (£340-380 billion) in railways from 2011 to 2015.

"Ensure the progress of projects," Sheng said in a speech to officials on Sunday, the official People's Railway Daily said. He did not mention Liu's case.

"In railway project tenders, purchases of materials and equipment, we must absolutely avoid sending notes, making approaches, and applying influence," he said, apparently referring to underhand ways of influencing tender bids.

Despite Shang's vows, the scandal could slow rail projects, said Yankun Hou, an analyst with Nomura International.

"The best case is that the dismissal of Liu is purely an anti-corruption case, and the new minister will not change the railway development strategy," he said.

"The worst case, in our view, is that the new minister might review previous strategy and might significantly slow down the railway construction plan."

Liu has championed high-speed rail expansion.

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