$323m bond issue plan
THE Guangzhou government plans to issue bonds worth 350 million yuan (about HK$323 million) to overcome a short-term shortage of funds to finance the city's underground railway system.
Chen Qingquan, general manager of Guangzhou Metro Corp, said funds could be raised from the issue of two-year bonds while it waited for foreign investments and money from land leases to flow in.
'We will need some financing to tide us over for the period ahead,' he said.
Mr Chen said the city government had submitted a proposal to the State Council but had yet to receive approval.
The first phase in the construction of Metro Line, a 5.3 kilometre section from Huangsha station to Guanggang station, has started and is due to be completed by July 1, 1997.
The entire railway, stretching 14.7 km with 13 stations and costing 14 billion yuan, is expected to be completed by 1998 and is due to be in full operation by the third quarter of 1999.
Mr Chen said up to 5.5 billion yuan would have been invested in the project by the end of this year. The funds will come mainly from three areas: sale of leases for land along the railway line, financial support from the government and 30 per cent of the city's income from the lease of land.
To date, 5,800 households affected by the construction of the railway have been relocated. An additional 24,200 households, representing 140,000 people, have yet to be resettled.
Guangzhou Metro Corp compensates affected residents by paying them 3,000 yuan per square metre or relocating them to districts away from the city centre.
Mr Chen rejected suggestions that residents had been unhappy with the compensation amounts. 'The progress made in the first phase - the technical, demolition and resettlement aspect - has been quite smooth. We are confident we can obtain the sites needed for the project.' Last month, the city's mayor, Li Ziliu, said the project was facing difficulties because of a downturn in the real estate market.
He said revenue from land leases this year would be about 800 million yuan, short of the 1.1 billion yuan expected.