BEIJING (REUTERS) - China has not yet decided who will take on the heavy debt load of the railways ministry, a senior official said on Monday, a day after the government announced it was dissolving the scandal-plagued ministry.

The railway restructuring plan, issued during China's annual National People's Congress, or parliament, is designed to end long-standing inefficiencies and address the ministry's reputation for insularity and corruption.

It gives China's transport ministry duties for railways planning, with safety and standards overseen by a state railways administration under the ministry. Commercial operations will be hived off to a newly established railways corporation.

"This reform deals first with separating the administrative and commercial (duties). Resolving this newly established enterprise's debt will be left for the next step," said Wang Feng, deputy director of the State Commission for Public Sector Reform.

The Railways Ministry has faced numerous problems over the past few years, including 2.6 trillion yuan (S$522 billion) in debt from funding new high-speed lines, according to state media.

By the third quarter of 2012, the ministry had a debt-asset ratio of 61.8 per cent and has been shaken by waste and fraud scandals.

Former railways minister Liu Zhijun was sacked in February 2012 and expelled from the ruling Communist Party last May for taking bribes. State news agency Xinhua said he used his position to help the chairman of an investment company get "enormous illegal profits".

Wang said the government would execute financing reform quickly, but continue to back the industry, particularly in the country's west, where he said the public interest of developing rail networks outweighs profit motives.