Accelerate Expressway Development of Two Ring Roads and Eight Radiating Roads and Realize the Chongqing s Function as a Traffic Hub in the Western

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1 Accelerate Development of Two Ring Roads and Eight Radiating Roads and Realize the Chongqing s Function as a Traffic Hub in the Western Development

2 Profile of Chongqing Chongqing Municipality lies in the buffer zone between Tibetan Plateau and Middle and Lower Yangtze Plain. It is where China s well-developed eastern region meets China's resource-rich western part. It is located in the Three-Gorge Reservoir Area and the southeast of Sichuan Basin

3 Profile of Chongqing Chongqing has a long history and prominent culture; meanwhile, it is a super-large industrial city with great significance. It is the largest traffic hub for water and land transportation in the upper reaches of Yangtze River and Southwest China. During the Second World War, it was the provisional capital of China in the war time.

4 Profile of Chongqing The city has an area of 82,400 square km. In 1997, Chongqing was designated by the central government as China s s fourth municipality directly under the central government. It has the jurisdiction of 40 administrative districts/counties and a population of million.

5 Profile of Chongqing GDP of Chongqing (GDP) Fiscal revenue Fixed asset investment Average income per capita in urban area Average income per capita in rural area Major Indicators in the Economic Development of Chongqing ( ) billion Yuan billion Yuan billion Yuan billion Yuan billion Yuan billion Yuan 5,023 Yuan 11,570 Yuan 1,479 Yuan 2,874 Yuan Average annual growth rate in the 10 years 10.2% 25.4% 22.6% 8.7% 6.9%

6 Chongqing s expressways Two Ring Roads and Eight Radiating Roads Network Planning

7 Chongqing s expressways 13 expressway projects have been completed, totaling 779 km and an investment of 29.8 billion Yuan. A network of One Ring Road and Five Radiating Roads has been established.

8 Chongqing s Projects Open to Traffic No. Road Project no. Project name Mileage (km) Investment estimation ( million Yuan) Open to traffic in 1 Inner Ring 3 Shang-Jie Section Shang-Tong Section Tong-Jie Section Yu-Chang Section Yu-Yi Yi 3 Chang-Liang Section Liang-Wan Section Yu-Qian 2 Jie-Lei Section Lei-Chong Section Yu-Wu 2 Yu-He Section He-Wu Section Cheng-Yu 1 Cheng-Yu Chang-Fu 1 Chang-Fu Qi-Wan 1 Qi-Wan Yu-Lin 1 Yu-Lin Wan-Kai 1 Wan-Kai

9 Inner ring expressway

10 Inner ring expressway at night

11 Yu-Yi

12 Yu-Wu

13 Chongqing s expressways 13 expressway projects have been completed, totaling 779 km and an investment of 29.8 billion Yuan. A network of One Ring Road and Five Radiating Roads has been established. There are 18 expressway projects under construction, totaling 1,174 kilometers and a planned investment of 82 billion Yuan. After the construction is completed, Chongqing will have a network of Two Ring Roads and Eight Radiating Roads

14 No. 1 Chongqing s expressway projects under construction Road name Yu-Xiang Project No. 6 Project name Investment estimation(100 million Yuan) Mileage (km) Planned to be Open to traffic in Jie-Shui Section Shui-Wu Section Wu-Peng Section Peng-Qian Section Qian-You Section You-Hong Section Yu-Yi Yi 3 Wan-Yun Section Yun-Feng Section Feng-Wu Section Dian-En 2 Dian-Zhong Section Zhong-Shi Section East Section Outer Ring 4 West Section South Section North Section Yu-Sui Yu-Lu Feng-Xi 1 Yu-Sui Jin-He Section Feng-Xi Total

15 under construction

16 under construction

17 under construction

18 Track Record of Chongqing s Development 870 Investment (100 million) Mileage open to traffic th 5-Year Plan 9th 5-Year Plan 10th 5-Year Plan 11th 5-Year Plan

19 Strategy of One Circle and Two Wings One Circle :One-hour economic circle Two Wings :Three- Gorge Reservoir Area and Southeast Chongqing Three-Gorge Reservoir Area One-hour economic circle Southeast Chongqing

20 Chongqing Express Development CO. Ltd. One of the eight largest financing and investment groups of Chongqing Responsible for the construction, operation, maintenance and financing of expressways in the whole city 12 departments and 13 construction, operation and industrial subsidiaries Its staff is over 4,000

21 Chongqing Express Development CO. Ltd. Problems faced by the Company: I. Construction risks poor geological conditions, intensive engineering and tight deadline

22 Chongqing Express Development CO. Ltd. Information about the expressways under construction Length of the line (km) Bridge and tunnel ratio Estimated investment (hundred million RMB) Average construction cost for every km (ten thousand RMB) Yulu % Suiyu % Yuxiang expressway % Outer Ring % Yuyi % Dian en % Total % In particular, the bridge and tunnel ratio of the Wufeng Project of the Yuyi is as high as 74%. And the estimated investment of the North Section Project of the Outer Ring is as high as 98.2 million RMB per km (a six-lane expressway), and 93.8 million RMB per km for the Pengwu Project of the Yuxiang (a four-lane expressway); in the Shuiwu Project of the Yuxiang, a difficult section is about 24 km long and has about 23 km of connected bridges and tunnels.

23 Chongqing Express Development CO. Ltd. bridges under construction are altogether 770, with a total mileage of 195 km. Medium-size bridges,126 16% Small bridges,43 6% Extra-large bridges,39 5% Large bridges,562 座 73%

24 Chongqing Express Development CO. Ltd. tunnels under construction are altogether 143, with a total mileage of 258 km. Short tunnels,32 22% Extra-long tunnels,31 22% Medium-length tunnels,36 25% Long tunnels,44 31%

25 Chongqing Express Development CO. Ltd. Problems faced by the Company: Capital: 29.3 billion RMB 65% 35% II. Fund 1.Construction funds The estimated overall investment of the 18 project under construction is 83.7 billion RMB. Loans: billion RMB captial loans

26 S. N. Project name 1 Yuling 2 Dianzhong 3 Project cooperation of Chongqing Express Development CO. Ltd. Chongqing Section of the Yusui Projects of joint development Co-investor China Railway Wuju Group Corporation China Tongda Electronic Network Corporation China Railway Construction Corporation Mileage (km) Total investment (hundred million RMB) Investment contributio n percentage Capital invested (hundred million RMB) % % % Subtotal S.N. Project name Co-investor Chongqing Section Projects with transferred operational rights Mileage (km) Appraised investment s (hundred million RMB) Investment contributio n percentage Capital invested (hundred million RMB)

27 Chongqing Express Development CO. Ltd. Problems faced by the Company: II. Money 2. Massive pressure from the credit principal and interest payment after the Two Ring Roads and Eight Radiating Roads are completed demand of the principal and interest payment funds can be used for the principal and interest payment

28 Schedule of the credit principal and interest payment from 2006 to 2020 Year Unit (hundred million RMB) tal of the principal and inteprincipal payment Interest payment

29 Year Table of the estimated revenues which can be used for the credit principal and interest payment from 2006 to Total revenues perated expres from the utiliz other revenues funds can be used for the principal and interest total cost operation and xes and additio Unit (hundred million RMB)

30 Countermeasures (I) Accelerate the construction efforts in order to complete the expressway network of Two Ring Roads and Eight Radiating Roads as soon as possible (II) Make efforts to ask the central and municipal government to increase the fund input in expressway construction and reduce the bank debts

31 Countermeasures (III) Make full use of the various financial products and vehicles es to plan the cash flow volume of the enterprise 1. Reorganization of debts 2. Utilization of new financial products. 3. Prevent the financial risks through hedging with financial derivatives

32 Countermeasures (IV) Seek policy support from the central and local governments 1. Realize the swap of the State Development Bank s s soft loans to capital through the debt-to-equity swap 2. Try to ask the governments to give guarantee, subsidies for the interest or other support when the Company is borrowing from the financial institutions i from home and abroad as well as the civil society for development t funds 3.Try to ask a the government to grant reduction, exemption or prompt return upon collection for the various taxes and fees in land confiscation, ion, demolition, relocation and construction 4.Try to ask a the government to grant some favorable policies of multiple operations relying on the expressway and priority in developing the land along the expressway

33 Countermeasures (V) Establish a platform, revitalize the idle assets and seek funds f in the capital market 1. The expressways completed in construction can be transferred in order to use the funds from the transfer to fill the gap of the credit principal and interest payment. 2. The stock options in the joint venture can be utilized to re-raise raise funds or reorganize the debts of the joint venture to collect the e funds back.

34 Countermeasures (VI) Provide excellent service to attract more vehicle traffic and a more passenger traffic (VII) Establish a diverse business chain centering on the expressway sway in order to increase the revenues from the tertiary industry

35 Thank you