H-share toll-road operator Jiangsu Expressway will be able to recoup its 100 million yuan (about HK$93.7 million) investment in a joint venture facing liquidation, according to company officials.
Yicao Highway, 49 per cent-owned by Jiangsu Expressway, was expected to be dissolved by the end of the year, said Jiangsu Expressway deputy general manager Li Dapeng.
'We estimate we can recoup our investment and earn a certain amount of returns,' Mr Li said yesterday. 'Over the first three years, the amount of investment we've recouped and returns earned was 41 million yuan.'
From 1999, Jiangsu Expressway had been guaranteed a fixed annual return of 17.8 per cent on its investment.
Yicao Highway is being liquidated before the scheduled opening of a parallel highway - Xiyi Highway - in 2004.
Xiyi Highway is expected to divert most of Yicao Highway's traffic and severely hurt the older road's earnings, according to Jiangsu Expressway officials.
Yicao Highway's liquidation was also prompted by the expiration of tax benefits it previously enjoyed. It will be hit with the full income-tax rate of 33 per cent from this year.