China's Fosun to invest in $6.9 billion Chinese high-speed rail project

Construction workers walk past a building of the headquarters of Fosun International, in Shanghai, China, December 14, 2015. RETUERS/Aly Song/File Photo

SHANGHAI (Reuters) - Chinese conglomerate Fosun International Ltd 0656.HK said on Thursday it will invest in a 46.2 billion yuan ($6.92 billion) private-partnership project (PPP) to build a high-speed rail link, becoming the first private firm to take part in a Chinese high-speed rail project.

China’s government is keen to lure private capital to infrastructure projects to alleviate the debt burden of local authorities, and has promised policies to support PPPs.

In January, the state planner said it would test PPPs in the railway sector with eight high-speed and intercity rail projects including one in Zhejiang province linking the coastal cities of Hangzhou and Wenzhou.

Fosun in an e-mailed statement said wholly owned subsidiary Shanghai Fosun High Technology Group Co Ltd [FOSUIA.UL] signed an agreement with the Zhejiang government for that project’s first phase joining the cities of Hangzhou and Taizhou.

Fosun did not state how much it would invest in the project. Its chairman, billionaire Guo Guangcheng, in the statement said there was much scope for investment as infrastructure per capita in China lagged that of developed countries.

China built the world’s longest high-speed rail network in less than a decade but its national railway operator took on heavy debt in the process. At the end of June, China Railway Corp’s liabilities totaled 4.21 trillion yuan.

Fosun also said Sunvision Capital, a subsidiary of its property arm, was involved in close to 500 billion yuan worth of PPP projects across China.

($1 = 6.6730 Chinese yuan renminbi)

Reporting by Brenda Goh and Adam Jourdan; Editing by Kenneth Maxwell and Christopher Cushing