SHANGHAI PLANS SOFT LOANS TO FINANCE MAIN PROJECTS
Shanghai plans to rely on soft loans
to finance a number of large-scale projects in the city
including an underground railway system, Mayor Jiang Zemin
said.
    Jiang told Reuters general manager Michael Nelson that he
hoped work on the railway system to ease Shanghai's transport
problems would start within two years.
    Other projects in this city of 12 mln people include a
bridge and an extra tunnel under the Huangpu river, a new
airport and passenger ship terminals and China's biggest
railway station, due to open at the end of this year.
    The mayor said foreign companies would be invited to
participate in some projects through international tendering.
    But he added that firms hoping to take part would have to
come up with package deals involving soft loan financing.
    "This is a complex issue. The conditions relating to
tendering will have to be associated with conditions for
receiving soft loans," he said.
    He said the city was willing to use commercial loans to
finance technological improvements to factories which could
show a quick return in increased exports and foreign exchange
earnings.
    "But infrastructure projects take much longer and involve
much bigger investments, and with them, the ideal way is to use
soft loans," he said.
    The mayor added that British, French and Japanese firms had
already contacted the Shanghai authorities with proposals on
the underground railway project.
    Western business sources in Shanghai said the project,
involving the construction of 14 km of tunnelled track, had
been discussed for over 20 years, adding it was expected to
cost at least 750 mln dlrs.
 REUTER
