Policy Update: Beijing seeks additional investment channels 
cctv.com 12-03-2003 12:43
In today's policy update, we talk about Beijing's infrastructure construction and management, which is expected to open the door to overseas or domestic private-owned companies. That was announced by the Beijing Municipal Development and Reform Commission. Experts say that this move could help Beijing local government find other channels to provide necessary fund to the public facilities.
Infrastructure includes supply of water, gas and heating, treatment of waste, and public transportation. The commission says it will adopt the build-operate-transfer or BOT and transfer-operate-transfer or TOT model. It means, when the contract expires, the investors must stop the operation and management of infrastructure projects, and transfer them to the government.
Wang Xiaoguang, Research fellow of Economic Research Center, SDRC
" The policy issued by the Beijing Municipal government is helpful to infrastructure construction and management. It promotes the opening up process, market access of social capital, investment in infrastructure construction, and urbanization. Especially before 2008, Beijing has a huge need for infrastructure investment, which will bring increasing fiscal pressure. I think, Beijing could not meet the need based only on its limited capital strength. The policy will play an important role in attracting investment, including the private capital and overseas capital to solve the backward development of Beijing's city construction."
Before 2008, Beijing is expected to complete 10 subway lines. The local government has decided to raise money through special construction funding. The decision will also bring business opportunity to would-be investors.
Wang Xiaoguang, Research fellow of Economic Research Center, SDRC
" For overseas investors, it has two implications. First, about 280 billion yuan or some 35 billion US dollars worth of investment in infrastructure construction will increase equipment imports, enhancing cooperation between Beijing and overseas companies. On the other hand, through BOT, they can directly participate in construction process and can have a chance to take market share to get bigger profits. "
It was announced earlier this month that Beijing will issue two billion yuan, or 240 million US dollars, in bonds next year to help finance its No. 4 and No. 10 subway lines, the total cost of which is expected to hit some 3.6 billion US dollars. Wang also says if the policy is properly implemented, he believes the local government can save over 10 billion US dollars in coming years.
GRAPHICS
Beijing seeks additional investment channels
--Supply of water, gas and heating, treatment of waste, and public transportation
Source: Beijing Municipal Development and Reform Commission
Beijing seeks additional investment channels
-Build-operate-transfer and transfer-operate-transfer
--Stop the operation and management of infrastructure programmes after certain period, and transfer them to the local government
Source: Beijing Municipal Development and Reform Commission
Beijing seeks additional investment channels
--US$240 m in bonds to help finance its No. 4 and 10 subway lines
--Total cost: approximately US$3.6 bn
Source: Beijing Municipal Development and Reform Commission
Editor:Zhang Source:CCTV.com
