A spokesman for the Beijing No 5 Subway Line Investment Co Ltd, a Sino-Canadian joint venture, made the remark in Beijing on Wednesday.

The line will cost a total of 12 billion yuan (US$1.4 billion), one-third of which, or 4 billion yuan (US$481 million), has been invested by the joint venture.

The other 8 billion yuan (US$963 million) will be raised via guaranteed loans from Chinese and Canadian banks.

Co-established by the Beijing Capital Group, the Beijing Subway Corporation, the Beijing State-owned Assets Management Company and Canadian SNC-LAVALIN, the joint venture has a registration capital of 4 billion yuan (US$481 million).

The Chinese and Canadian sides contributed 62.5 per cent and 37.5 per cent of the total respectively.

"According to international practices, investments beyond the registration capital should be separately attracted by the two sides in line with their respective shares,'' the spokesman said.

The Beijing branch of the China Construction Bank has signed a letter of intent to provide a loan of 5 billion yuan (US$602 million) for the subway line's construction.

The Canada-based Montreal, Royal and State banks have also issued secured loan authorization letters worth a total of 3 billion yuan (US$361 million) for the SNC-LAVALIN company.

Sources from the Beijing municipal government have indicated that, in a bid to offer support for the project, the joint venture will have priority in developing the 142-hectare area of land that the line will take up.

Ticket prices for the line will be decided depending on its construction and operation costs, which will be checked and ratified by the joint venture and related government departments.

(China Daily 03/30/2001)