MTR Corporation Limited has entered into a Principle Agreement for a Public-Private Partnership (PPP) project with Hangzhou Municipal Government and Hangzhou Metro Group Company Limited for the investment, construction and operation of Hangzhou Metro Line 1. The Principle Agreement sets out the framework for the Corporation to further discuss with Hangzhou Municipal Government for the Concession Agreement for the investment in Hangzhou Metro Line 1 and for the operational right of Hangzhou Metro Line 1 Phase I for a period of 25 years.
     The project will be divided into Part A and Part B representing approximately 63% and 37% of the RMB$22 billion investment respectively. The civil construction of the metro system of Part A is being undertaken by Hangzhou Metro Group Company Limited. The investment in and construction of Part B which mainly covers the electrical and mechanical system and operation of the entire metro line will be undertaken by the Cooperative Joint Venture which will be owned by the Corporation (49%) and Hangzhou Metro Group Company Limited (51%).

     The 48-km Hangzhou Metro Line 1 consists of 41 km of underground section and 7 km of at-grade and elevated sections. Hangzhou Metro Line 1 is the first among the eight planned lines of Hangzhou city. Civil construction works for the project commenced in March 2007. A total of 30 stations, running from south to north of Hangzhou city, to other second cities, namely Xiasha, Linping and Jiangnan. The line is expected to commence service in 2012.