Sapphire Corp unit scores PPP project in China

MAINBOARD-LISTED infrastructure design and construction group Sapphire Corporation said on Monday that its subsidiary, Ranken Railway Construction Group Co Ltd, and its consortium partners, have secured a public-private-partnership (PPP) project in Chengdu, China.

It will involve working with the Urban and Rural Coordination Work Bureau of Chengdu Wuhou District in the investment and financing, design, build, operate and transfer works for the first phase of the Wuhou District Liveable River Bank project in Chengdu, expected to last some 15 years.

Sapphire Corporation said that the consortium's involvement will include the design, building, financing and management of ecological restoration, flood control measures and building infrastructures along an 18.68 km long embankment along the Jiang An River, one of the key waterways in Chengdu. The project is part of a broader urban renewal effort to create a greener living environment in the Wuhou District.

The cost of the PPP project has been estimated at 1.4 billion yuan (S$0.3 billion); 20 per cent of the cost will be funded by the consortium partners, with the rest funded by project financing from financial institutions.

Ranken will invest in a 25 per cent equity stake in the project company to be set up by the consortium, with an initial cash investment of 7.5 million yuan, to be funded through Ranken's internal resources.

Revenue from this PPP project is expected to be derived from government subsidies and the operational/management rights of the building infrastructures along the river bank for a 13-year period. The consortium partners are looking to develop new recreational amenities, and F&B (food and beverage) retail and lifestyle concepts, for longer-term recurring revenue.

Sapphire Corporation CEO Wang Heng said: "This PPP project is different from the water treatment infrastructure projects previously undertaken by us as it provides the group a learning ground to gain new insights and expertise in the integrated water improvement and environmental management component of this PPP project.

"Apart from the potential of revenue contribution from the PPP project, the group is directly involved in the entire spectrum of the PPP project, thereby accumulating new valuable knowledge and operating experience in the PPP industry; and it will be very useful in expanding our presence in the PPP industry."