The National Development & Reform Commission (NDRC) of China has approved a public-private partnership (PPP) project that covers the investment, construction and operations of Hangzhou Metro Line 1.
Following the approval, MTR Hangzhou Line 1 Investment, a subsidiary of MTR, signed a contract with a subsidiary of Hangzhou Metro group to establish a joint venture (JV) company to invest in and operate the line for 25 years.
Hangzhou Metro group will supply 62% for the RMB22bn ($3.45bn) project, which is the first of eight metro lines planned in the city of Hangzhou.
The new JV will invest RMB8bn ($1.25bn), around 38% of the total project cost, as well as taking responsibility for electrical and mechanical systems and operating the line.
Hangzhou Metro Line 1 is scheduled to be opened later in 2012, featuring 31 stations on a 48km north-south route, 41km of which will be underground.
MTR has a 49% stake in the new JV, while Hangzhou Metro group owns the remaining 51%.
Image: Hangzhou Metro Group Company chairman Shao Jianming and MTR deputy chief executive officer Lincoln Leong signed the contract to set up the Joint Venture. Photo: courtesy of MTR Corporation.