CKI and Hopewell Sign Agreement On Guangzhou East South Ring Road
19 July, 1996 - Hong Kong
Through their respective wholly-owned subsidiaries, Cheung Kong Infrastructure Holdings Limited (CKI) and Hopewell Holdings Limited announced that they have signed a supplementary agreement with Guangzhou Freeway Company regarding the construction, management and operation of the East-South section of the East-South-West Ring Road in Guangzhou.
This supplementary agreement comes further to an original contract signed between Hopewell and Guangzhou Freeway on November 23, 1992 regarding the entire East-South-West Ring Road.
The East-South-West section of the Guangzhou Ring Road has a total length of 39.4 km. The three parties involved have agreed to construct the East-South-West Ring Road in separate phases, beginning with the 19.4 km East-South section. Discussions are currently underway for the next phase of construction, the 20 km West-South section of the Ring Road.
The total project cost is estimated to be RMB 2 billion. Guangzhou Freeway will be the fixed price turnkey contractor for the construction and management of the project. CKI and Hopewell have agreed to jointly invest the US dollar equivalent of RMB 1.9 billion - which will be paid in phases according to the engineering timetable, while Guangzhou Freeway will be responsible for the remaining RMB 100 million. Guangzhou Freeway will undertake the design and construction of the East-South section of the Ring Road at a fixed price turnkey contract.
The joint venture will last for a period of 30 years, commencing when construction is completed on the East South section of the Ring Road. Construction is expected to be completed in 1998.
This Sino-foreign joint venture is unique in two aspects. Firstly, the foreign party is represented by two investors - namely CKI and Hopewell, who are injecting the majority of the capital for the project. Secondly, the Chinese party is offering the foreign parties an assured minimum return of 20% on investment.
Officiating at the signing ceremony were Mr Victor Li, Chairman of CKI; Mr Eddie Ho, Deputy Managing Director of Hopewell Holdings; and Mr He Yi Chuan, General Manager of Guangzhou Freeway Company.
There were also a number of guests attending the ceremony, including senior leaders from Guangzhou: Mr. Chen Kai Zhi, Senior Vice-Mayor of Guangzhou; Mr Dai Zhi Guo, Vice Mayor of Guangzhou City; Mr Lang Shang Li, Member of the CPPCC: All China Standing Committee; as well as more than 20 city government officials and representatives from Guangzhou Freeway Company.
Representing the events' local partners were Mr Li Ka-shing, Chairman of Cheung Kong (Holdings) Ltd; Mr Gordon Wu, Managing Director of Hopewell Holdings Ltd; Mr H L Kam, Managing Director of CKI; and Mr Charles Lee, Non-Executive Director of CKI. Other guests included Mr Zhu Yu Cheng, Deputy Director of Xinhua News Agency HK Branch; Mr Guo Pei Nan, Vice Chairman and General Manager of Guangzhou Investment Company Ltd; and Mr Francis Leung, Managing Director of Peregrine Investments Holdings Ltd.