In a bid to finance the construction of massive and expensive high-speed railway projects, the Ministry of Railways (MOR) has taken on a mountain of debt.

By the end of June 2011, the debts of China's railway operators, all affiliated to the MOR, totaled 2.09 trillion yuan ($324.1 billion), with an asset-liability ratio of 58.53 percent, slightly up from 58.24 percent in the first quarter, according to data from the Shanghai Clearing House, an interbank clearinghouse under the People's Bank of China.

Meanwhile, the MOR-affiliated transportation companies posted a profit of 4.29 billion yuan ($665.1 million) for the first half of 2011, reversing a loss of 3.76 billion yuan ($583 million) in the first quarter.

The ministry is coming under mounting financial pressures as the country continues to expand the high-speed transport networks, said Ou Guoli, a professor with the Beijing Jiaotong University.

It is necessary for the government to fend off possible risks and ensure the sustainability of its debt, he said.

So far this year, the ministry has auctioned 85 billion yuan ($13.2 billion) worth of bonds to finance the building of high-speed railways.

Stephen Green, a senior economist with Standard Chartered Bank, said he doubts if the ministry's operations can generate enough free cash flow to cover the interest payments on its debts.

But Yu Bangli, chief economist of the MOR, downplayed the worries. "A debt crisis is less likely because the debt ratio remains within a safe range," said Yu, at a press briefing in June.

High-speed railways may require hefty investments, but they can effectively facilitate transport, and stimulate the flow of human resources, technologies and capital, he said.