Raffles Infrastructure: Consortium signs deal to build tourist railways for around 6 billion yuan

China yuan coins

Raffles Infrastructure said on Monday that its consortium signed a framework deal with the Tourist Board of the People’s Government of Dengfeng City, in China, to build tourist railways of around 70 kilometers with an estimated contract value of 6 billion yuan (US$864.70 million or S$1.19 billion).

Its wholly owned subsidiary, Raffles (Chengdu) Investment and Development, entered the agreement with consortium partners including Chengdu Tianfu Railtech Valley Technology and China Railway 23rd Bureau Group, it said in a filing to SGX on Monday.

The government of Dengfeng city will also provide assistance to support for the project, it said.

Dengfeng City has tourist attractions including the Zhongyue Temple and Songyang Academy as well as a Shaolin Temple believed to have been founded in the 5th century of the Christian era, it said. The Shaolin Temple and Pagoda Forest were named a Unesco World Heritage Site in 2010, it said.

The project is set to be completed in four phases, it said.

Phase one will last from 2018 to 2020, building a railway between Songshan’s Tourist Centre to Shaolin Temple Tourist Area, a distance estimated at 15 kilometers, with an estimated contract value of 1.3 billion yuan, Raffles Infrastructure said.

Phase two, from 2020 to 2022, will complete a tourist railway between Songshan’s Tourist Centre to Songshan Study Courtyard and Zhongyue Temple, an estimated distance of 15 kilometers, with a contract value of around 1.3 billion yuan, it said.

For phase three, running from 2022-2024, the contract, valued at around 1.7 billion yuan, calls for building a tourist railway between Zhongyue Temple to Luya Waterfall and Safari Zoological Park, an estimated distance of 20 kilometers, the filing said.

In the final phase, from 2024 to 2026, the consortium will build a tourist railway between Safari Zoological Park and Chaoyanggou Xiqu Town, an estimated distance of 20 kilometers, with a contract value of 1.7 billion yuan, the filing said.

Raffles Infrastructure said it expected a positive earnings contribution from the project, but that it wasn’t expected to have a material impact on the net tangible assets and earnings per share for the current financial year ending 31 December.

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