Another challenge for the proposed state railways administration and China railway corporation is how to win back people's trust in the railway system, which has been hit hard by a series of corruption and safety scandals in the past few years.

The country's former railways minister, Liu Zhijun, was expelled from the Communist Party of China for corruption in May last year following a high-speed train collision that left 40 people dead and 172 injured near the eastern city of Wenzhou in 2011.

Liu had accepted massive bribes and bore the major responsibility for the rampant corruption in the railways system, according to the the CPC Central Commission for Discipline Inspection.

An official with the Nanchang Railway Bureau said on condition of anonymity that the unreasonable concentration of power led to corruption.

He said he hopes separating the administrative functions from the commercial functions can curb corruption in the railway system.