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Sapphire Corporation Limited has announced that its 97.6% owned subsidiary, Ranken Railway Construction Group Co., Ltd. and its consortium partners have secured a PPP project to carry out investment and financing, design, build, operate and transfer works for the first phase of the “Liveable River Bank” project in Wuhou District, Chengdu, Sichuan Province, China.

Focusing on a broader urban renewal effort to create a greener living environment in Wuhou District, this PPP project involves the design, build, finance and management of ecological restoration, flood control measures and building infrastructures along an 18.68 km embankment along Jiang An River, one of the key waterways in Chengdu.

The consortium partners include Beijing Enterprises Water (China) Investment Limited, Chongqing Derun Environment Co., Ltd. and Nuclear Industry Southwest Survey and Design Research Institute Co., Ltd.

The DBFOT works period of the project is expected to be 15 years, which comprises two years of construction as well as the operational/management rights of the infrastructure along the river bank for a 13-year period.

The cost of this PPP project is estimated at CNY1.4 billion (~US$200 million), where 20% of the cost will be funded by consortium partners in proportion to their shareholding in the project company, and 80% will be funded by project financing from financial institutions.

The registered share capital of the project company is CNY50 million (US$7.2 million) and the initial equity investment is set at CNY30 million (US$4.3 million), with the balance of equity injection to be disbursed into the project company in tranches progressively over the course of the construction period. As part of the consortium, Ranken will contribute 25% of the equity interest with an initial cash investment of CNY7.5 million (US$1.1 million), which will be funded through Ranken’s internal resources.

Revenues will be derived from government subsidies and operational/management rights of the infrastructure along the river bank, whereby the consortium partners are looking to develop new recreational amenities (such as bicycle and pedestrian pathways), food and beverage retail and lifestyle concepts to generate long-term recurring revenue.