Highways a target 'if return is right'

Anhui province is planning to build three highways in the next three years to help link the mainland's western regions with the east.

The cost of the project, part of China's 10th five-year plan, is estimated at 13.2 billion yuan (about HK$12.3 billion).

The chairman of H-share Anhui Expressway, Wang Shui, said the government had earmarked about 10 billion yuan a year to build highways between 2000 and 2005, so his company had ample opportunities to obtain management rights.

'We will target those projects which have an estimated return rate of 15 per cent,' he said.

The company, which is backed by the Anhui provincial government, already manages a number of highways in the province. It enjoys the advantage of being the preferred buyer of the rights.

The three highways to be built in the next three years are: a 220km highway linking Nanjing, the provincial capital of Jiangsu province, to Maanshan, Wuhu and Tongling in Anhui along the Yangtze River; a 120km highway connecting Bengbu and Nanjing; and a 100km highway from Fuyang to Bengbu.

About 400km of highways are under construction in Anhui, and a further 1,000km are on the drawing boards for the next three years.

Anhui Expressway has yet to decide which of the new highways it will acquire. It usually acquires the rights to manage highways from its government-backed parent Anhui Expressway Holdings, or the province's Transportation Bureau.

Other possible acquisition targets include a 13km, 300 million yuan segment of an expressway linking Anhui's provincial capital, Hefei, with Hangzhou, the provincial capital of Zhejiang, and a 160km, 3.7 billion yuan highway between Anqing and Hefei.

Anhui Expressway has applied to the China Securities Regulatory Commission to issue up to 250 million A shares in an initial public offering on the Shanghai stock market to finance the acquisition of an expressway section that will help link the port of Lianyungang, on China's eastern coast, and Huoerguosi on the Sino-Russian border in Xinjiang.