Hubei seeking investors for huge infrastructure boom
Hubei province hopes to tap Hong Kong's deep-pocketed investors for a huge splurge on infrastructure as it seeks to turn itself into a mainland transport hub.
The provincial government of Hubei is seeking investment from Hong Kong companies for more than 150 projects on which massive budgets have been lavished. It has earmarked an investment budget of 12 trillion yuan (HK$13.76 trillion) for the next few years, nearly 10 times the province's GDP last year. The money will be spent mainly on transport, energy and urban construction.
Xu Kezhen, director of the Hubei Provincial Development and Reform Commission, said the many projects are aimed at 'turning Hubei into a transport hub in central China'.
Wuhan vice-mayor Sun Ya said: 'We have a series of infrastructure and services projects in Wuhan to attract Hong Kong investors.'
Infrastructure spending is expected to top 100 billion yuan this year, Sun said. 'We must rely on private investment. The government does not have all that money. We still have to eat.'
Wuhan's infrastructure spending last year was 86.3 billion yuan, 45 per cent more than in 2008.
Hong Kong investors have expressed interest in investing in Wuhan's plan to build more than 68 car parks with an investment budget of 6.36 billion yuan from 2011 to 2013, said Lei Dechao, chairman of the Wuhan Urban Construction Investment and Development Group, a state-owned firm.
Last year, the State Council approved a development plan for Wuhan from 2010 to 2020, which affirmed the city's importance in central China, Sun said. 'Going forward, we will speed up urban infrastructure construction and services, which will bring investment opportunities for Hong Kong businesses.'
Wuhan mayor Ruan Chengfa said: 'From 2011 to 2015, Wuhan will witness huge investment, huge construction and huge development. The city's appearance will change fundamentally.'
Projects in the pipeline include a high-speed railway, four metro rail lines, expansion of Wuhan New Port's annual capacity to 10 million 20-foot equivalent units and 100 million tonnes by 2030, a third terminal and second runway for Tianhe Airport, and 10 cross-river tunnels, Sun said.
This year, the local government formed an agency to focus on Wuhan New Port, said Li Zhongjie, logistics director of Wuhan International Container Transshipment Company, a Hong Kong-invested port operator.
'We are bullish on Hubei, especially Wuhan's ports. When companies come to Wuhan, they need to see if the ports and infrastructure can satisfy their export and logistics requirements. The Yangtze River is Wuhan's rice bowl,' Li said.
In the first half, the Hubei government approved 58 projects involving Hong Kong investment totalling US$963 million, representing a year-on-year growth of 20 per cent.
Hubei governor Li Hongzhong said Hong Kong has been the most important source of foreign investment in his province, with more than 6,600 projects involving total investment exceeding US$8 billion, which accounts for 42.5 per cent of all foreign investment in the province.
In the first half, trade between the two places reached US$744 million, a 96.3 per cent increase from the same period last year.