Japan trading powerhouse Marubeni Corp is unlikely to invest in the first phase development of the Guangzhou metro line, according to its deputy chief for China.
Kenichi Nishida, also chairman and managing director of Marubeni Hong Kong, said the Guangzhou government tried to entice the group's investment in the project but the expected low return made it unattractive to foreign investors.
The metro line investment would be huge but the tariff was strictly controlled by the Chinese government, he said. Also, the Guangzhou government would not provide a guarantee on the rate of returns.
Mainland figures put the cost of the first phase at 15 billion yuan (about HK$13.93 billion).
Foreign firms might be interested in financing metro projects in China but not in direct investment.
Noting that the tariff issue would be very difficult to solve, he said: 'The chance for us to invest in the [Guangzhou metro line] is not high but we haven't come to a final conclusion yet.' Up to March, the trading giant has pumped US$1.8 billion into China. About $300 million was direct investment in 110 joint ventures and wholly owned operations with the rest being financing.
Mr Nishida said the group had not earmarked a specific amount of money to be put into China. The figure depended on the deals it arranged.
