China's Ministry of Railways (MOR) began on Wednesday to raise 20 billion yuan (US$2.9 billion) for railway construction by floating its second batch of bonds this year in the inter-bank bond market.

The bond issue comprised 15 billion yuan of 10-year bonds and 5 billion yuan of 15-year bonds, with a bidding yield rate range of 3.73 percent to 4.73 percent.

Proceeds would be used to construct 12 new rail lines, the MOR said.

Last month, the MOR floated its first batch of bonds this year to raise 20 billion yuan for railway construction.

Earlier this year, the State planner National Development and Reform Commission gave the green light to the MOR to issue 80 billion yuan of bonds this year, mainly to facilitate construction of 31 railway construction projects and locomotive purchase.

China plans to extend its rail network to 100,000 km by 2020 from 76,600 km in 2006, which will cost an estimated 2 trillion yuan.

(Xinhua News Agency October 16, 2008)