CKI Participates In Hong Kong Infrastructure Projects
Acquiring Interest In Eastern Harbour Crossing Rail Tunnel

15 June, 1999 - Hong Kong

Cheung Kong Infrastructure Holdings Limited (CKI) announced today that, together with CITIC Pacific Limited (CITIC), they have signed an agreement to acquire a 90% interest in Eastern Harbour Crossing Company Limited (EHCC), the concessionaire holder of the Eastern Harbour Crossing rail tunnel, from the Kumagai Group of Japan.

CKI will pay an aggregate of HK$379 million for acquisition of a 50% interest in EHCC and shareholder's loan. CITIC, an original 10% shareholder of EHCC, will increase its shareholding in EHCC from 10% to 50%.

Established in 1986, EHCC is the concessionaire holder to operate the railway tunnel that connects the eastern side of Hong Kong Island and the Kowloon Peninsula. Construction began in August 1986, and the project was completed and became operational in August 1989. The project was implemented under the BOT method, such that the assets of EHCC will revert to the Hong Kong Government in February 2008.

The Eastern Harbour Crossing rail tunnel, 2.2 km in length, provides a key link in Hong Kong's mass transport rail network. The Mass Transit Railway Corporation (MTRC) operates mass transit trains through the rail tunnel.

According to Mr H.L. Kam, Group Managing Director of Cheung Kong Infrastructure Holdings Limited, "We are pleased with our investment in such a high quality asset in Hong Kong, given its reliable, steady cash flow. As the Cheung Kong Group and CITIC have a longstanding relationship in property development in Hong Kong, we are pleased to extend our cooperation to the infrastructure business. The MTRC, rated A and A3 by Standard and Poor's and Moody's, respectively, is a most creditworthy customer. With attractive returns and low risk, this asset will enhance the quality of our infrastructure portfolio."

Mr Kam continued, "The purchase of the interest in EHCC is one of CKI's many initiatives in infrastructure development in Hong Kong. We are currently pursuing several infrastructure opportunities with solid fundamental strengths."

"As the Hong Kong government is studying the possibility of privatisation, corporatisation and opening up of numerous infrastructure sectors, we believe there will be more investment opportunities for CKI in the future. CKI will closely monitor the development and actively examine the feasibility of our participation in Hong Kong infrastructure," concluded Mr Kam.

CKI is a diversified infrastructure company with three core businesses: infrastructure materials, energy and transportation. Our transportation portfolio comprises toll roads and bridges in 10 cities in China.

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