The Qinghai-Tibet railway, scheduled for operation on July 1, may not roll out profits immediately but it is sure to bring benefits to local regions.

"Strategically important to Tibet's development, this railway is an infrastructure project for public welfare rather than for commercial purposes," Sun Yongfu, Vice-Minister of Railways, told China Daily.

"In initial years, it will have to strive to cut losses and to make ends meet."

Sun is also the deputy chief of the Qinghai-Tibet Railway Construction Leading Group under the State Council.

The railway, the first to connect the inland Tibet Autonomous Region with the rest of China, is an "all-weather powerful route" to facilitate economic and social development of northwestern regions, he said.

But to ensure it runs on permafrost safely and without detriment to the fragile plateau environment, the government needs to continue offering policy and financial support in the years ahead, the vice-minister said.

The official was on an inspection tour in Golmud, the second largest city in Northwest China's Qinghai Province, as workers put the final touches on a railway that stretches 1,110 kilometers from the city's Nanshankou station to Lhasa. Construction started in June 2001.

The railway joins an 814-kilometer-long track that links Golmud to Xining, provincial capital of Qinghai, which opened in 1984. Together with a 32-kilometer-long line that stretches from Golmud to Nanshankou station, they form the 1,956-kilometer Qinghai-Tibet Railway that traverses the "roof of the world."

The budget has been well controlled due to public tendering, rational construction schemes, strengthened contract management and investment monitoring. Total investment amounted to 33.09 billion yuan (US$4.09 billion), or nearly 30 million yuan (US$3.7 million) for each kilometer, according to Sun.

"You can't expect tremendous volumes of freight to be ferried along the line in the first few years, given economic growth may take time due to the geography and history of Tibet," the vice-minister said.

Tourism prospects on the other hand are rosy.

"The Qinghai-Tibet Plateau, although bleak and oxygen-starved, is a mysterious magnet for many travellers," he said.

But as the central authorities have decided that the railway is a public welfare infrastructure to buttress and balance regional growth, hard coach tickets for passenger trains bound for Lhasa are priced at the same rate as those running elsewhere in China, while sleeping-carriage tickets are specially priced at low levels.

However, operational costs on the plateau are much higher, Sun said.

For one thing, the thinness of the air could cut power by almost half at elevations above 4,000 meters, meaning trains will have to consume more fuel to maintain a maximum speed of 120 kilometers per hour in non-permafrost regions, sources from the Ministry of Railways said.

Other operation costs include spending on routine railway maintenance, further research on permafrost, environmental conservation and prevention of natural disasters, Sun said.

Freight fees, which may vary according to different categories, will average 0.12 yuan (US$1.5 cents) per ton/kilometer, compared with at least 0.4 yuan (US$5 cents) on the Qinghai-Tibet highway, which was built half a century ago and currently conveys nearly 85 percent of cargoes to Tibet, according to Sun.

"For these reasons and to cover operation costs, the Qinghai-Tibet Railway Corp will need special policies from the State, such as tax breaks or exemptions," Sun said.

The official said he believed the railway will substantially resolve one of the biggest bottlenecks affecting the sustainable development of Tibet.

It will help raise the competitiveness of Tibetan products by driving down transport costs, and in the same way, elevate the local people's living standards by securing affordable in-bound consumer goods.

Cement prices in Tibet, for example, range from 700 yuan (US$86) to 900 yuan (US$111) a ton, compared with an average of 300 yuan (US$37) elsewhere in China. The price will plummet to national level if the cement is transported via railway instead of highway, he said.

Earlier operation

When it starts in a few days, the world's highest railway will have been put into operation one year ahead of schedule, evidence that railroad authorities have confidence in the quality control of the whole line.

In addition to addressing the nettlesome permafrost problems, another factor contributing to earlier completion is that construction was launched from both directions towards Tanggula Mountain Pass and Lhasa, from Amdo Railway Station in Tibet in 2004, according to Sun.