Guangzhou Ring Road

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In March 1998, Hopewell Holdings and Cheung Kong Infrastructure (CKI) signed a joint venture contract for the construction and operation of the Guangzhou East South West Ring Road - a 39-km, dual 3-lane expressway. The municipal JV partner is the Guangzhou Freeway Company. The original JV contract was signed in 1992. The partners signed an additional contract for the South East section in 1996. This contract brought together the South East and South West sections under one contract and gave the partners a 30-year operation period after the full road becomes operational. Completion of the 19-km SE section was due in June 1999, and a 6-km section has been operational since September 1997. The 20-km SW section was due to open by July 1997. Total project costs are HK$4.225 billion (Rmb4.5 billion, US$ 542 million). CKI and Hopewell agreed to invest Rmb 2 billion and Guangzhou Freeway Rmb 500 million. 80% of the capital was invested by March 1998, and the remaining 20% was expected in April. CKI owned 44.4% stake in the JV company. Guangzhou Freeway has a turnkey construction contract on a fixed price basis. The private participants share of profits during the contract is 90% for the first 10 years, 75% for the second 10 year, and 65% for the final 10 years. None None