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They helped China build the longest highway network in the world in three decades. Now, the country’s largely state-backed toll-road operators have run out of financial steam just as policy makers prepare to revive infrastructure spending and a slowing economy.

Enter the private investor, if President Xi Jinping’s latest drive works.

Regulation being proposed would allow road operators to levy a toll on users beyond the current 15-to-30-year limit, potentially boosting an industry that has been hobbled by losses as companies struggle to earn enough to cover their debt and operating costs.

“The extension of the tolling period can help to woo private investors into highway development,” said Zhu Haibin, chief China economist at JPMorgan Chase & Co. in Hong Kong. The plan shows the government’s desire to promote joint government and private-sector projects, he said.

The move underscores Xi’s reluctance to repeat his predecessor’s reliance on a record surge in local government debt to fund the post-2008 stimulus. Authorities are instead leaning on policy banks to sell bonds, injecting money into such lenders and freeing up more commercial-bank reserves for lending -- avoiding adding to state liabilities directly even as they prepare to unleash fresh stimulus.

Luring private money to fund construction of roads, airports and other public works would help. To do that, China needs to make those projects more lucrative. Extending toll collection by 10 years would generate almost 4 trillion yuan ($640 billion) more from existing highways, according to calculations by Bloomberg News based on last year’s fee revenue.

‘Drinking Poison’

“The government may have realized that if they want to attract private investment in government-backed projects, they have to offer higher returns,” said Hu Xingdou, an economics professor at the School of Humanities and Social Sciences at Beijing Institute of Technology. “If they continue to rely on government stimulus to drive growth, it will be quenching your thirst by drinking poison.”

China’s planning agency in May published a list of 1,043 public-private partnership projects with total investment of 1.97 trillion yuan. Some 176 of these are transport projects like roads and bridges with a price tag of 1.27 trillion yuan, or 64.5 percent of the total.

These projects are up against a daunting history.

After a cumulative 6 trillion yuan of investment in toll roads as of the end of 2014, China now has the world’s biggest highway network at 112,000 kilometers (69,600 miles), according to the Ministry of Transport.

Debt Buildup

Yet the country’s 162,600 kilometers of toll roads -- two-thirds of which are highways -- have accumulated 3.85 trillion yuan of debt by the end of last year. That’s a 12.1 percent jump from 2013, according to an annual report published by the ministry. Debt and interest payments amounted to 420.8 billion yuan in 2014 -- higher than all the toll fees collected last year.

As a result, China’s toll roads reported a loss of 157.1 billion yuan last year, more than double the deficit in 2013.

Extending the tolling periods by five years could boost the value of listed highway operators like Shandong Hi-Speed Co. and Shenzhen Expressway Co. by 12 percent on average, according to Wu Yanfeng, transport industry analyst at Sinolink Securities Co. in Shanghai.

The plan is already being tested by a public backlash, with Chinese press and social media highlighting the burden on the country’s more than 100 million private car owners.

Toll charges for a car traveling from Beijing to Shanghai can be about 600 yuan, more expensive than a one-way ticket on the high-speed train. The China Federation of Logistics and Purchasing estimates that the unit cost of shipping coal in China is as many as 15 times that of the U.S. and up to 20 times Japan’s, citing toll fees as an important reason.

Still, “the cost of building roads is rising sharply, and if revenue can’t be raised, it may increase debt burdens for local governments,” said Sinolink’s Wu. The rule change “is in line with boosting investment returns in infrastructure projects so that other investors are more willing to take part.”

— With assistance by Xin Zhou