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A three-yuan (US$38 cents) paper ticket to travel on Beijing's subway will be an antique scrap by 2008.

The paper tickets will be phased out in favour of IC cards in time for the Olympic Games, sources with the Beijing Metro Company said on Friday.

It is part of the city's efforts to modernize the metro system and ease the city's worsening traffic gridlock.

Subway journeys will be charged by distance, instead of the fixed fare of three yuan, with single journeys unlikely to cost more than the current price.

Paper tickets have been in use since the Beijing subway started operation in 1981 but many people switched to IC cards when they were introduced in April this year.

An average of 1.3 million passengers use Beijing's metro system every day and the number can exceed two million at busy times.

Beijing currently has two subway lines and two light rail tracks, totaling 114 kilometers. Three more subway lines are under construction and will be completed by 2008 Olympic Games.

China's capital will expand its subway system to 561 kilometers by 2020, with 19 lines in operation, surpassing London as the city with the world's most extensive underground.

(Xinhua News Agency December 16, 2006)