China’s Ministry of Railways is to set up a private equity fund, according to a report in the China-based financial newspaper 21st Century Business Herald.

The fund could potentially raise up to CNY100bn ($15.7bn) from banks, insurance companies and the National Council for Social Security Fund, which manages the Chinese state’s social security assets.

A source for the paper also suggested that the state’s economic planner will aid the ministry in securing up to CNY150bn in loans.

The ministry has had to deal with financial troubles of late, exacerbated by a two train accident in July that killed 40. The Chinese government has responded by cutting taxes on the interest paid on railway bonds, and earlier this month publicly stated the bonds have government support.

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