HONG KONG metro operator MTR Corp signed a 30-year agreement in principle on January 15 to extend and operate Line 4 of the metro network in neighbouring Shenzhen. The BOT deal was signed by MTR Chief Executive Chow Chung-Kong and Liu Jiasheng of the Shenzhen Municipal Development Planning Bureau.
Under the corporation's first investment project outside the Hong Kong region, an MTR subsidiary company will build the second phase of Line 4 and operate the entire route after this is completed at the end of 2008. Ownership of the line will pass to the city government at the end of the concession period.
The 4·5 km first phase is expected to open later this year, and will initially be run by Shenzhen Metro Corp. It runs south from Shaoniangong to the Hong Kong border crossing at Huanggang, where it will provide interchange to KCR's Lok Ma Chau spur. The 16·5 km second phase will run north from Shaoniangong through the Shenzhen Special Economic Zone to Longhua New Town, bringing the total number of stations to 14.
The 6bn yuan extension will be funded by the project company, whose equity of 2·4bn yuan will be provided by MTR. Other strategic investors may be sought, although MTR would retain a controlling stake. Up to 60% of the funding will come from 'other sources'. The project company has been allocated land along the route for development, and plans to build up to 26000 apartments with a total floor area of 269400m2.