Beijing subway system provides opportunity
By Liu Jie (China Daily)
Updated: 2004-06-30 08:27

Four urban rail projects in Beijing that went on public display yesterday offer ample opportunities for domestic and foreign investors, according to analysts.

Wang Qi, general manager of Beijing Infrastructure Investment Co Ltd, said the total investment in the four railway lines will reach 49.92 billion yuan (US$6.01 billion). The projects involve the construction of the No 4, No 5, and No 9 lines, and the first-phase of No 10 (including the Olympic branch line). A total railway length of 103.54 kilometres will be built.

The four urban rail projects in Beijing will offer ample opportunities for domestic and foreign investors, according to analysts.[newsphoto]

"While 70 per cent of the funds needed, or 34.94 billion yuan (US$4.21 billion), will come from fiscal investment; the remaining 30 per cent, or 14.98 billion yuan (US$1.81 billion), is to depend on private investment," said Wang.

According to the investment documents issued by the Beijing Infrastructure Co Ltd, designated by the municipal government to act as the government investment party, the government will be responsible for the requisition and relocation of residents, earth works (including building of subway stations, holes, vehicle pieces and parking lots), railways 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 communication, air-conditioners, water supply and drainage, fire controls, escalators, elevators, control equipment and power supply facilities.

"Private investors should also conduct the maintenance and renewal of cavities, stations and equipment, and operate advertising, communication and commercial facilities along the subway lines," said Wang.

The government investment party will sign a contract with the private investor that wins the bid, to set up a co-operative licensed operating company.

"The government investment party is to control the co-operative company but does not have the right to make decisions on daily operations, and will not share the income or be responsible for any deficits," said Wang.

"All revenue from tickets, advertising and commercial rentals will be enjoyed by the private investor."

At the end of the licensed period, generally 30 years, the co-operative company must transfer the project, free of expense, to the government.

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