MTR Corp, Hong Kong's subway operator, said it signed an agreement with the government of Hangzhou City in east China to operate and invest in a 22-billion-yuan (US$3.2 billion) mass transit rail line.
MTR will take a 49-percent stake in a venture responsible for the electrical and mechanical system of the Hangzhou Metro Line 1, MTR said in a statement on its Website on Friday. Hangzhou Metro Group Co will own the remaining share.
The Hong Kong subway operator has been trying to tap the Chinese mainland's rising demand for underground mass transit systems, fueled by urbanization and economic growth, Bloomberg News said. The joint venture, which will operate the line for 25 years, is set to invest 37 percent of the total project cost, or 8.1 billion yuan, MTR said.
China may triple the length of metropolitan railway lines in operation to 1,500 kilometers by 2015 from 440 kilometers at the end of 2006, China Railway Group Ltd, Asia's largest construction company, said in its initial public offering prospectus in November 2007.
The line in Hangzhou in Zhejiang Province is the first of eight planned for the coastal city, South China Morning Post said on Saturday. Hangzhou is the third mainland project with direct MTR investment, after ventures in the southern city of Shenzhen and in the national capital of Beijing. Construction of the 48-kilometer Hangzhou Line 1, undertaken by Hangzhou Metro, began in March 2007. The construction work will account for 63 percent of the total project cost. The 30-station line, which has underground and elevated sections, is expected to begin service in 2012, MTR said.
MTR and Hangzhou Metro also signed a deal on Friday to explore the possibility of developing properties along the line.
(Shanghai Daily January 19, 2009)