China Railway Construction Corporation has recently announced that its subsidiary China Railway 24th Bureau Group Co., Ltd. won the PPP bidding process for the redevelopment of the south plaza in Fuzhou North Railway Station.

The concession period under the project is 10 years, of which the construction period takes 3 years and the operation period takes 7 years.

The project adopts the Public-Private-Partnership (PPP) model with Fuzhou Urban and Rural Construction and Development Corporation being the subject investee of the government under the project.

Fuzhou Urban and Rural Construction Corporation will establish a PPP project company with public investors who won the bid and such project company will be responsible for financing, construction, transfer and operation as well as the signing of the general construction contracting agreement for the project with the investor, i.e. 24th Bureau Group.

The registered capital of the project company amounts to RMB50 million (US$ million 8.14), of which RMB15 million will be contributed by Urban and Rural Construction Corporation (holding 30% equity interests in the project company) and RMB35 million will be contributed by public investors (holding 70% equity interests in the project company), respectively.

24th Bureau Group will be holding 70% equity interests in the investee through partnership with industry funds, of which RMB10 million will be contributed by 24th Bureau Group and RMB25 million will be contributed by industry funds.

The fund balance required for the construction of the project will be financed by borrowings. The estimated construction costs of such project will be amounted to approximately RMB2.088 billion (US$340 million).

During the concession period under the project, Fuzhou Urban and Rural Construction Commission or its delegated authority will grant the project company with construction and financing subsidies by way of service purchase at 10% of the construction costs and the corresponding financing costs.

The operating revenue of the project company will be mainly derived from the rental and management income from commercial properties, carparks, etc.