CKI, Hopewell linked for Guangzhou road project

Guangzhou municipal government expects to sign an agreement with Cheung Kong Infrastructure Holdings and Hopewell Holdings this month on a 2.5 billion yuan (about HK$2.32 billion) investment in the city's south-west section of its ring road.

Vice-mayor Chen Kaizhi said: 'What remains to be settled among the joint venture parties is profit allocation after the loan is repaid.' He said the Guangzhou municipal government hoped to receive 30 per cent of profits after the loan was repaid - a figure agreed to in principle by the Hong Kong parties, who are yet to work out the mechanism's finer points.

The mainland party would contribute about 500 million yuan in the 20 kilometre southwest section ring road.

Mr Chen said Yue Xiu Enterprises (Holdings), with its listed arms Guangzhou Investment and GZI Transport, would take part in the development of the new Baiyun International Airport.

The shareholding structure of the airport company among the Yue Xiu group, the investment arm of the Guangzhou government, was not determined yet.

The project, given the go-ahead by the State Council last month, will cost about 15 billion yuan. It will be run by a shareholding company 51 per cent owned by the Civil Aviation Administration of China and 49 per cent owned by local governments.