Four urban rail projects in Beijing that went on public display Tuesday offer enticing opportunities for domestic and foreign investors.
Wang Qi, general manager of Beijing Infrastructure Investment Co. Ltd., said that total investment in the four railway lines is set at 49.9 billion yuan (US$6.0 billion). The projects involve the construction of the Numbers 4, 5 and 9 lines and the first phase of Number 10, which includes the Olympic branch line. The total length of lines to be built is 103.5 kilometers.
"While 70 percent of the funds needed, or 34.9 billion yuan (US$4.2 billion), will come from the government; the remaining 30 percent, or 15.0 billion yuan (US$1.8 billion), depends on the private sector," said Wang.
Beijing Infrastructure, designated by the municipal government to act as the government investment agent, reports that the government will be responsible for the requisition of land and relocation of residents, earth removal work (including building of subway stations, access areas and parking areas), rail lines and civil defense.
The private investors will be in charge of the purchase and installation of electromechanical equipment such as vehicles, automatic ticket-checking systems, signals and communications, climate control, water supply and drainage, fire control, escalators, elevators, control equipment and power supply.
"Private investors should also handle maintenance and repair of tunnels, stations and equipment, and operate advertising, communication and commercial facilities along the subway lines," said Wang.
The government investment party will enter into contracts with private investors to establish cooperative licensed operating companies.
"The government investment party will control the cooperative company but does not have the right to make decisions on daily operations. It will not share the income or be responsible for any deficits," said Wang. "The private investor receives all revenue from tickets, advertising and commercial rentals."
At the end of the licensed period, generally 30 years, the cooperative company must transfer the project, free of charge, to the government.
(China Daily June 30, 2004)
