The investment agreement for the Hangzhou-Shaoxing-Taizhou railway public-private partnership project was signed, marking China’s first high-speed line with private investors taking the controlling stake. This is one of the eight railway projects that involve PPP scheme, approved by China’s National Development and Reform Commission.
A group of private investors led by Chinese conglomerate Fosun International will invest around 40.9 billion yuan (USD 6.2 billion) in the project, and will hold a majority stake. Thus, a consortium of eight privately owned enterprises led by Fosun International will take a controlling 51 percent stake in the 12.36 billion yuan (USD 1.9 billion) registered capital of the railway project.
Under the PPP contract, the project company will set the ticket price, while China Railway Corp and its Shanghai Railway Bureau will be in charge of the daily operation of the railway line.
Construction of the line will take four years and the joint operation period will be 30 years. As the project will adopt a build-own-operate-transfer cooperation mode, the railway will be transferred to the government for free after the 30-year period ends.
The construction companies for the railway project will be appointed in a separate bid that is scheduled for the next months. The construction works are estimated to be launched by the end of this year. The consortium of privately owned enterprises and the Zhejiang government will jointly set up a project company that will be responsible for the construction.
Shanghai Sunvision Capital, the PPP investment division under Fosun, will participate in the railway project. According to Wen Xiaodong, president of Sunvision, the income from the railway project will be made up of operating income and a government subsidy.
The Hangzhou-Shaoxing-Taizhou HSR project involves the construction of 269 km line with 9 stations. The line will allow trains to run at speeds of 350 km/h.
Photo: CRRC
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