The concession agreement for Beijing Metro Line 16 was initialled today on 8 February by the Beijing Municipal Government, Beijing MTR Corporation Limited (Beijing MTR) and the three shareholders of Beijing MTR.

Line 16 is a Public Private Partnership (PPP) project and Beijing MTR would participate in the investment, operations and maintenance of the new line.

Beijing MTR is a joint venture comprising MTR Corporation Limited (49%), Beijing Capital Group Limited (49%) and Beijing Infrastructure Investment Corporation Limited (2%).

Mr Lincoln Leong, Acting Chief Executive Officer of MTR Corporation, said:

"As a shareholder of Beijing MTR, we are most honoured to have the opportunity to extend the safe, reliable and convenient metro service that we currently provide on Line 4, the Daxing Line and Line 14 to even more commuters. Through this fourth metro project of Beijing MTR, we hope to continue to contribute to the sustainable development of Beijing."

"This new line will run through three major districts and connect to the city's metro network through 13 interchange stations, making passengers' journeys faster and easier and enhancing the overall convenience of Beijing's metro system which is used by 10 million passengers a day," explained Mr Richard Wong, General Manager of Beijing MTR.

The Line 16 project has a total capital cost of about RMB¥49.5 billion (US$8.04 billion). The project is divided into Parts A and B. Part A is for the line's civil construction and the work is being undertaken by Beijing Infrastructure Investment Corporation Limited. Under the PPP arrangement, Beijing MTR would be responsible for Part B which covers electrical and mechanical systems as well as rolling stock. Part B takes up about 30% or approximately RMB¥15 billion (US$2.43 billion) of the project's capital cost.

MTR Corporation would contribute additional equity of up to RMB¥2.45 billion to Beijing MTR for Line 16.

Under the Concession Agreement, Beijing MTR would undertake the operations and maintenance of Line 16 for a term of 30 years. The Concession Agreement is subject to approval by relevant authorities in the Mainland.

The 50-kilometre Line 16 will include 29 stations and open in two phases. Phase 1 is targeted to open by the end of 2016 while full line operations are expected to commence after 2017.