China will invest $63bn in expanding the network in 2012, down 17 per cent from last year and a sharp decline from the $112bn spent in 2010.
A Ministry official in Beijing, Tian Yunlei, said a total of 6,366km of new lines will be commissioned this year.
Last year 2,022km tracks were completed and commissioned, less than half of the 5,000km targeted.
The Ministry will also provide $15bn to construct rail lines that are needed to transport thermal coal to coal-fired power plants.
Tian said these lines are important and are needed to complete a trunk railway network to speed up economic development particularly in the less developed western regions.
Several projects that are due to start construction this year have been deferred to 2013 or possibly later because of a lack of funds, while others due to be completed in 2012 will be delayed between six months to a year. These projects have a combined network of 10,620km lines.
Construction of all rail tunnels in Yunnan province has been suspended.
Tian attributed the lack of funds to the Rail Ministry’s inability to secure loans from the banks, because the Federal government’s stimulus plan of $632bn had been used up.
Heavy borrowing in the past has put the Ministry in a quandary, with a debt of $316bn.
In a separate development, work begins in February on a second high-speed line on the popular resort island of Hainan. The first section of the 345km line will connect with Phoenix International Airport in Sanya, at the southern tip of the island. Construction of the other 11 sections will start in the second half of the year. Completion is scheduled for 2015. Trains will travel at up to 250km/h.
Dubbed the Western Ring Railway, it will cost $4.3bn and will link up with the 308km-long Eastern Ring Railway to form a circuit around the island.
High-speed trains are proving a big attraction in Hainan. Some 10 million tourists have travelled on the ERR since December 2010. The line links Haikou, the capital at the northern end of the island, to Sanya.