CKI Establishes Presence in Henan Province
- Signs Contract to Invest in Zhumadian Sections of National Highway 107 -

26 June, 1997 - Hong Kong

In addition to last week's signing of contracts for seven road sections in Hebei Province regarding 179 km of roads connecting Tangshan City to Jingtang Port, Cheung Kong Infrastructure Holdings Limited (CKI) has signed new contracts regarding two Zhumadian sections of China's National Highway 107, located in Henan Province. The signing ceremony, held yesterday (June 25, 1997) in Zhengzhou, the capital city of Henan Province, marked CKI's first move into this central province of China.

Totalling 113 km in length, the Zhumadian sections are important links of China's well-known National Highway 107, a main artery connecting the Northern and Southern regions of China and an essential part of the PRC's highway network.

The new contracts represent a total investment of RMB 580 million, of which CKI has a 66% interest - for a total CKI investment of RMB 383 million. The joint venture period will last for 27 years. As these road sections are currently operational, they are ready to generate revenue for CKI.

Located in the Central region of the country, Zhumadian is a main transportation hub for the region - and a pass-through point for both the Jingguang Railway and National Highway 107.

Zhumadian is rich in cultural and historical significance. Due to its central location, it was a well-known horse changing station for mounted couriers in the past; hence the name Zhumadian, which - literally translated - means "changing horse point." Its location at the crossroads of China made Zhumadian a natural gathering point for artists, poets and businessmen alike; as well as a gateway for travellers heading both North and South.

With the signing of these Henan road contracts, CKI's investment in China now extends from Guangdong Province in the South and Liaoning/Hebei Provinces in the North to Henan Province in the Central region. These contracts also represent a significant start to CKI's investments in the infrastructure development of Henan Province.

According to Mr H L Kam, Group Managing Director of Cheung Kong Infrastructure Holdings Limited, "CKI is currently in negotiations for a number of additional infrastructure projects in Henan Province, and intends to develop a solid core of projects in line with our clustering strategy."

"There are several factors that make Henan Province stand out as an attractive region for infrastructure investment: its geographical advantages and large population, as well as the Chinese Government's initiative to increase the profile of the country's Central region," continued Mr Kam.

Mr Kam concluded, "CKI's involvement in the Zhumadian road projects is a milestone for CKI's investment in the Central region of the country. The fact that these contract signings are taking place only a few days before the return of Hong Kong to China at the gateway city of Zhumadian - a city so rich in culture historical significance - is particularly meaningful."

With the addition of these new road contracts, CKI now has a total of 712 km of roads in its PRC transportation investment portfolio, representing a total road and bridge investment of approximately HK$5.8 billion.

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