On Feb.7, Hong Kong's MTR Corporation and its joint operation partner Beijing Municipal Government drafted and signed the "Special Operating Agreement" for Beijing's No.4 subway line. This agreement would be implemented after it is officially approved by the National Development and Reform Commission.

This is the first joint public-private management project in China's urban rail transport construction program.

The No.4 subway's special operating status will last 30 years. Its estimated construction cost is 15.3 billion yuan. About 10.7 billion yuan, or 70% of the investment, would be funded by the Beijing Municipal Government while the total investment of PPP, the joint venture company, would be about 5 billion yuan. As for PPP's registered capital of 1.5 billion yuan, the MTR Corporation and the Beijing Capital Group would each account for 49% while the Beijing Infrastructure Investment Co., Ltd would account for 2%. Two-third of PPP JV's capital would be non-recourse bank loan. The capital investment of MTR Corporation would be 735 million yuan.

It was learned that by way of the special operating agreement, ticket prices of Beijing's No.4 subway line would still be decided by the Beijing Municipal Government. If the subway's operating deficits were greater than expected, the government would offer appropriate subsidies.

(Chinanews.com February 10, 2005)