950812

China to

issue bonds

for subway

project

BEIJING: Guangzhou, capital of China's southern Guangdong province, will issue 300 million yuan (US$36.2 million) in bonds to help fund construction of a subway in the city, China Daily said.

The bond issue was still awaiting approval from the central government, it quoted officials from the Guangzhou Subway Construction Co as saying.

Guangzhou Mayor Li Ziliu estimated total investment for the project, the city's largest, might exceed the planned 12.7 billion yuan ($1.53 billion). Estimated investment was only half that amount two years ago before the project began at the end of 1993.

The current metro phase one was funded mostly by local government and foreign government loans.

Germany won the lion's share of contracts to supply $414 million out of $500 million of foreign equipment needed in the first phase, the newspaper said.

Contracts to develop 25 out of the 27 areas of land along the Metro one line have been agreed between local government and foreign land developers. Total land development will earn neighbouring Hong Kong $4 billion to aid construction.-Reuter