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Raffles Infrastructure inks preliminary pact for 6b yuan China rail project
RAFFLES Infrastructure Holdings, formerly known as China Fibretech, said on Monday afternoon that it has entered into a framework agreement to build about 70 kilometres of tourist railways in China with an estimated contract value of six billion yuan (S$1.19 billion).
The company later provided a breakdown of the contract value for each of the project's four phases in a press release after market close.
Raffles Infrastructure's subsidiary, Raffles (Chengdu) Investment and Development Co, inked the preliminary agreement on Oct 19 with the Tourism Board of the People’s Government of Dengfeng City and Chengdu Tianfu Railtech Valley Technology Co.
The agreement sets out the preliminary intentions of the parties and is subject to certain conditions precedent, including the signing of a definitive agreement after relevant reports required for construction initiation are completed.
Raffles Infrastructure will provide services including construction and management of the railway, stations and trains, for the project.
The project will be completed in four phases, with the first two spanning 2018-2020 and 2020-2022 and each one involving building tourist railway over about 15 km with estimated contract value of 1.3 billion yuan.
In each of the last two phases, which will be in 2022-2024 and 2024-2026, about 20 km of railway will be built with estimated contract values of 1.7 billion yuan.
A land surveyor report and an environmental report for each of four individual phases of the project are required.
The Government of Dengfeng City will provide assistance and support to facilitate the project, the company said.
The project is not expected to have any material impact on the group's earnings for the year ended Dec 31, 2018.
Raffles Infrastructure closed at S$0.43, up 3 Singapore cents or 7.5 per cent on Monday.