The State Council has issued a circular, stressing the orderly development of urban rail transit systems to meet the actual demands of cities.

Urban rail transit is important to the transportation systems of modern cities, but in some cities, problems in excessive construction and misconduct in the use of funds still exist, leading to heavier debt burdens for local governments, according to the circular.

The circular stressed efforts to control the debt risks of local governments and develop urban rail transit in a reasonable manner to fit the level of a city’s development.

Urban rail transit, except for trams, should be listed in a city’s transportation system planning and subject to review and approval procedures, said the circular.

Cities that can apply for constructing subways should have more than 30 billion yuan in public budget revenues, a regional GDP of more than 300 billion yuan, and a permanent urban population of 3 million.

Also, cities that can apply for constructing light rail should have more than 15 billion yuan in public budget revenues, a regional GDP of more than 150 billion yuan, and a permanent urban population of 1.5 million, the circular said.

The circular required the reasonable planning of urban rail transit networks to ensure that the local government’s expenditures in construction and operation are within financial resources. It also encouraged use of land conservation technologies and models and carrying out environmental impact assessment.

Local governments should set up transparent capital funds, and a long-term mechanism on capital input should be set up to ensure sufficient funds during construction.

The circular stressed supporting local reform in investment and financing systems, attracting private investment in the sector, and carrying out diversified operations.

It also called on efforts to control local government debt resulting from urban rail transit construction, and asked local governments to control the liability ratio of construction enterprises.

An interministerial supervision mechanism should be established, and regular inspection systems should be set up by local governments, the circular said.