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Planning for the future with big investments
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PROJECT after project, Chengdu has been constructing public infrastructure at a furious pace in a bid to modernize. The expansion of subway lines is the city government’s focus this year.
The capital of Sichuan Province has witnessed rapid growth in terms of its Metro network, a reflection of the city’s efforts to create a better public environment and make life better for its residents.
According to official documents, Chengdu plans to invest 18.2 billion yuan (US$2.95 billion) this year to expand its Metro network. It already has two lines. In the first six months, about 7.58 billion yuan has been spent, doubling the amount spent in the same period a year earlier.
Seven subway projects have already begun, including new lines and extensions on existing lines totaling 125 kilometers. The city also plans to kick off five more projects this year to add another 89.7 kilometers to the network.
By the end of this year, Chengdu is expected to have begun construction on more than 200 kilometers of track and 153 stations.
“It is a year of hard work,” said Liu Sining, vice general manager at state-owned Chengdu Metro Group. “As a leading investor in infrastructure, we have to make good use of the money. We also have to help optimize the city’s Metro network.”
Liu said the original government budget was 16.8 billion yuan, but Chengdu Metro aimed higher and eventually negotiated the figure to 18.2 billion yuan.
“Everyone of us is geared up to accomplish this great task,” Liu said.
Chengdu is also investing in new roads, bridges, tunnels, highways, stadiums, hospitals and schools. In a document issued last month, Chengdu’s authorities rolled out 22 measures to facilitate economic growth in the city, among which faster construction of key infrastructure projects was listed as a priority.
Sun Tingyun, deputy director of the Chengdu Development and Reform Commission, said investment will continue to play a key role in the city’s economic growth.
“Chengdu will accelerate fixed-asset investment by quickly approving funds and land for projects,” Sun said. “We will also secure investment from different sources. Chengdu encourages foreign and private investment to participate in infrastructure construction and we will also build more affordable housing.”
Guideline renew
The government this year will renew a guideline for investment in infrastructure construction and streamline administrative procedures for investments under 50 million yuan to improve efficiency, according to the document.
At the same time, the government wants earlier quality and security inspections during the construction of key infrastructure projects. It will release construction certificates phase by phase to guarantee the progress of each project.
In terms of private funds, investors can channel them into industries that were previously dominated by state funds, but will still be excluded from certain sectors like national security.
“Both infrastructure construction and public projects welcome investment from the private sector,” Sun said. "It can be done through private-public partnerships or a build-operate-transfer model.”
Private-public partnerships, known as PPP, refer to a popular fund-raising mechanism in which the government cooperates with the private sector. The Hangzhou Metro Group has adopted such a model for the management of its two lines. It signed a joint-venture deal with Hong Kong MTR in 2012 to operate Metro Line 1 for 25 years.
The build-operate-transfer scheme, or BOT, is also widely used in attracting investment, especially in road construction.
Chengdu is also going to offer incentives for companies that carry out massive fixed-asset investment. Companies can apply for rewards of up to 1 million yuan for projects worth more than 500 million yuan in the manufacturing or information industries. For service sector investments totaling more than 1 billion yuan, the government will allow low interest rate loans.
According to the Chengdu Statistics Bureau, fixed-asset investment expanded 10 folds from 2001 to 650 billion yuan last year, ranking the city as a top investor among provincial capitals for five consecutive years. In the first six months of this year, fixed-asset investment reached 322.1 billion yuan, up 2.2 percent from a year earlier.
Among the investment, funds in infrastructure construction totaled 29.8 billion yuan in the first five months, fulfilling 53.4 percent of the plan for this year.
“In the second half of this year, we will enhance efforts to unify growth between urban and rural areas, and raise the efficiency of investment to make sure we reach the target of 55.8 billion yuan,” Chengdu Commission of Housing and Urban-Rural Development officials said earlier.
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