Details of a project for a new railway ferry link between Yantai in
east China and Dalian (YDRFP) in northeast China were presented in
Beijing Friday in order to draw direct foreign investment. This is
a dramatic change in China's usual policy for financing railway
construction projects.
According to the Chinese Ministry of Railways, the rail/ferry link
begins in Dalian City at the south end of the Liaodong
Peninsular and terminates in Yantai City in the north part of
Shandong peninsular, crossing the Bohai Bay in a direct line for
79.4 nautical miles or 147 km and will shorten the traveling
distance between Northeast China and Shandong province by 400 km,
and Northeast China and the Yangtze delta by 1000 km.
With the authority of the Ministry of Railways, the Shangdong
Provincial Government and Dalian City Government, Sinorail Bohai
Train Ferry Co. Ltd (SBTFC), the Chinese sponsor, is now seeking
direct foreign investment to establish a joint venture or
cooperation company which will be fully responsible for financing,
constructing, operating and maintaining the project.
Chi Baozhang, general manager of the SBTFC, said the project will
be carried out by using the BOT (build, operate and transfer)
method as traditionally used in joint ventures.
The total investment is estimated at 3.39 billion yuan (US$408.4
million), of which approximately 2.43 billion yuan will be used for
construction, said Chi, adding that investors' profit return is
predicted to be above 12 percent.
According to Chi, to create a good investment environment, the
Chinese Ministry of Railways, Shangdong province and Dalian City
government have promised to ensure the completion and operation
ofrelevant railways and roads as well as rear transport
corridors.
Investors will also be given preferences for the use of land, water
and power, communication facilities, roads and railways, he added,
and favorable taxation policies will also be given to the company
in accordance with the laws and regulations of the Chinese central
government, Shangdong province and Dalian city government.
Wang Chunsheng, director of the Railway Cooperation Department
under the MOR said that the examination of investment offers will
start in May and hopefully to be completed by June.
The project is estimated to be completed in two and a half years
and be operational by 2005.
(Xinhua News
Agency April 27, 2002)