THE New China Hong Kong Group plans to invest in a four billion yuan (about HK$3.72 billion) second expressway in Chengdu, capital of Sichuan Province. Liu Shoucheng, vice-chief of the Chengdu Traffic Bureau's Expressway Management Department, said New China chairman Tsui Tsin-tong had expressed interest in the outer ring road project, which would circle a second ring road in the outskirts of Chengdu. The 88 kilometre road is intended for vehicles by-passing Chengdu. 'Mr Tsui was given priority for this project when he agreed to invest in the Chengmian expressway last year,' said Mr Liu. The outer ring road follows New China's investment in the 1.3 billion yuan Chengmian expressway, which will be completed in 1997. According to Mr Tsui, the 90 km expressway which links Chengdu and Mianyang has produced 'satisfactory returns' for the group. Mr Tsui, a member of the Chinese People's Political Consultative Conference and an adviser on Hong Kong affairs to the State Council, confirmed his company's interest in the latest project. He would not reveal the size of the stake the company would take in the project as negotiations were still taking place. New China is an investment fund started in February 1993 to link investors from Hong Kong, China, Taiwan and Southeast Asia. Mr Liu said the outer ring road would be built in three or four phases over five years and was part of the Ninth Five-Year Plan. Construction should start next year. It is understood the road will have a four-lane carriageway, but it is yet to be decided if motorists will be charged a toll to use it. 'It depends on whether or not we need a bank loan for the project. If we do, then we will have to charge a fee for vehicles using the road,' said Mr Liu. 'A lot of the funding for expressways depends on the local governments. This is because foreign investors are under the impression that the returns will be low and are hesitant [to invest].' He said the returns for such projects were about 15 per cent. In view of the austerity drive and the central government's push on infrastructure projects, foreign investors were beginning to realise it was wise to invest in them now. Mr Liu said toll collections from the city's expressways were between 300,000 and 400,000 yuan a day. He said Sino-foreign co-operation agreements on such projects were for 15 to 20 years but the foreign investor should be able to make profits after seven years. Mr Liu said Chengdu would need to build more expressways and widen roads to cope with the increasing traffic flow. 'We will need another 15 to 20 years to finish developing the roads for a comprehensive network. 'But it will not be easy as land is scarce and the population is growing.'