Li in talks over $5.4b power plants in Hebei

Kenneth Ko

TYCOON Li Ka-shing is negotiating to invest in two power plant projects in Hebei province having a total cost of about four billion yuan (about HK$5.4 billion at the official rate).

Hebei Vice-Governor Chen Liyou said provincial officials had made ''pleasant contacts'' with Mr Li on the projects.

Mr Chen said the projects were being negotiated with Mr Li's companies for joint-venture development and shareholdings had not been finalised.

One project was the proposed installation of two 300-megawatt generators at the Beiwang power plant in Qinhuangdao, needing an investment of about two billion yuan, he said.

The other was a two billion yuan scheme to install two 300 MW generators at a thermal power plant in Tangshan, he said.

Power plant development constitutes the major portion of the 2,189 projects being offered by Hebei for foreign participation at its trade fair which opened in Hongkong yesterday.

Mr Chen said many Hongkong companies were interested in power plants, highways, restructuring of state-owned enterprises and real estate development.

He said China Merchants (Holdings) and several banking institutions, including Bank of China, would participate in the 2.7 billion yuan development of the 228-kilometre Beijing-Shijiazhuang highway.

An agreement for the project, in which China Merchants would take a 30 per cent interest, was expected to be signed during the fair, he said.

Yesterday, Hongkong Macau International Investment concluded a contract to invest US$58 million for a 25 per cent stake to install two 300 MW generators in the Hengshui power plant.

Besides power plants and highway projects, Hebei is offering the Huanghua port development in Tangshan and 175 projects for restructuring state-owned enterprises.

Also on offer are 198 urban redevelopment projects.

Regarding the central government's warning against excessive numbers of development zones, Cheng Weigao, secretary of the Hebei Provincial Committee, said the Hebei real estate industry was still in its infancy.

He said most such development zones in Hebei were industrial-oriented and were not affected.

Meanwhile, Victor Li Tzar-kuoi, deputy managing director of Cheung Kong (Holdings), said the austerity programme implemented by Beijing would not disturb his group's expansion plans in China.

He said the austerity drive was aimed at cooling down the property market, while Cheung Kong's focus in China was more on infrastructure developments.