Hong Kong's subway operator said it has signed an agreement with the government of Hangzhou city in eastern China to operate and invest in a 22 billion yuan (Dh11.7bn) mass transit rail line, according to an agency report.
MTR and Hangzhou Metro also signed an agreement to explore the possibility of developing properties along the line, South China Morning Post quoted an unidentified MTR spokeswoman as saying.
MTR will take a 49 per cent stake in a venture responsible for the electrical and mechanical system of the Hangzhou Metro Line One, MTR said in a statement on its website.
Hangzhou Metro Group Company will own the remaining share.
The Hong Kong subway operator has been trying to tap the mainland's rising demand for underground mass transit systems, fuelled by urbanisation and economic growth.
The joint venture, which will operate the line for 25 years, is expected to invest 37 per cent of the total project cost, or 8.1bn yuan, MTR said in the statement.
China may triple the length of metropolitan railway lines in operation to 1,500km by 2015 from 440 km at the end of 2006, China Railway Group, Asia's largest construction company, said in its initial public offering prospectus in November 2007.
The line in Hangzhou in Zhejiang province is the first of eight planned for the coastal city, South China Morning Post reported yesterday.
Hangzhou is the third mainland project with direct MTR investment, after ventures in the southern city of Shenzhen and in the national capital of Beijing, the Hong Kong-based English-language newspaper reported yesterday.
Construction of the 48-km Hangzhou Line One, undertaken by Hangzhou Metro, began in March 2007. The construction work will account for 63 per cent of the total cost.
The 30-station line, which has underground and elevated sections, is expected to begin service in 2012, MTR said in the statement yesterday.
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