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China Railway Group has announced it has entered into an investment agreement with the Yulin Municipal Government and the Yan’an Municipal Government for the Public Private Partnership (PPP) project of the Suide – Yanchuan Motorway (including Qingjian – Zichang High-speed Connection Line) in Shaanxi Province (China).

The total investment amount of the project is estimated to be CNY13.1 billion (US$1.96 billion).

The motorway is around 119 kilometers in length, and will follow the design standards for a two-way four-lane motorway. The concession period of the project is divided into a construction period and an operation period. Specifically, the construction period is 39 months, commencing on the date when the construction permit is obtained and ending on the date when the construction is completed and delivered, and the operation period is 30 years, commencing on the issuance date of the toll permit and ending on the transfer date of the project.

The project will adopt a PPP model, under which the Yulin Municipal Government and the Yan’an Municipal Government, as the government authorities under the project, will select the company as the private party through public procurement, and the company will establish a project company which is responsible for the investment, construction, operation, maintenance and transfer of the project.

The project will recover its investment and receive reasonable return on such investment through collecting tolls and obtaining operating income from the service facilities, advertisements and other operating resources in the specified zones along the motorway, and will be transferred to the government authorities at nil consideration upon the expiration of the operation period.

The contents in the agreement are the key cooperative conditions to the investment in the project. After the execution of the agreement, the Yulin Municipal Government and the Yan’an Municipal Government will enter into a concession agreement with the project company to agree upon the specific matters relating to investment, construction, operation, maintenance and transfer of the project.