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Foreign Fund Injected into Construction of Beijing No 5 Subway Line
More and more infrastructure projects, include Beijing Subway Line 5, began to resort to various channels of fund raising.
According to Beijing Daily, Beijing municipal government has signed a draft agreement with SNC- Lavalin Group Inc, a leading engineering and construction firm in Canada, for the building of subway line 5. Beijing will inject 2.5bn yuan and Lavalin 1.5bn yuan. Then Lavalin would further raise 6 to 7 bn yuan. After completion the government would guarantee returns of Lavalin's investment by compensation funds after costs evaluation.
For a long time most infrastructure projects depend on government funds because of their large scale, long construction period as well as low price levels, an official says. As a result many domestic and foreign investors can not enter the field of infrastructure construction to meet people's demand.
Preferential policies have been released by the government to attract and encourage investors both at home and abroad to participate in Beijing's infrastructure construction and operation. Qualified investing enterprises would be selected out via public bidding, whether they are state or privately owned, domestic or foreign ones.
By PD Online Staff Li Heng
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