Press Release

October 22, 2000 - Hong Kong - Cheung Kong Infrastructure Holdings Ltd (CKI), together with French company, Groupe GTM (GTM); South Korean company, Daewoo Corporation (Daewoo); and South Korean Pusan and Kyongnam governments signed a memorandum of understanding (MOU) earlier for the construction and concession of a bridges and tunnel project connecting Pusan and Koeji Island in South Korea.

The signing ceremony, which took place in Seoul, was witnessed by French President Mr Jacques Chirac. The cost of the project is estimated to be US$1.7 billion (approximately HK$13 billion), of which the South Korean government would subsidize US$500 million. In view of the current discussion progress, details of the agreement are expected to be finalized in the next few months.

According to the MOU, CKI would hold around 33% of the stake of the joint venture, GTM 40% and Daewoo 27%. The joint venture is to be granted concession for 40 years, and the South Korean government would offer revenue guarantees.

The total length of the project is to be 8.2 km, and the whole project would consist of two 3.5 km bridges, a 3.7 km tunnel, and a one km embankment. Construction period is estimated to be five to six years. The plans call for a large scale bridges and tunnel project connecting Pusan city and Koeji island which is situated at the southernmost part of the country. Pusan is the second largest city of Korea and its international airport is the second largest one in the country. This project, when completed, is expected to reduce travelling time between Koeji and Pusan from the current three to four hours to about half an hour. For people living and working in Koeji island, the transportation project would greatly enhance convenience in their daily lives while for the commercial and industrial corporations in Koeji, such as the Daewoo Docks, as well as the general economy of Koeji, the project is expected to bring great economic benefits.

Mr H L Kam, Group Managing Director of CKI, said, "Our discussions with French corporation, GTM; South Korean corporation, Daewoo; and Kyongnam and Pusan governments in regards to the Pusan - Koeji transportation project are going on very well. This is part of CKI's overall investment strategy of expanding in existing business while actively pursuing new investment opportunities. When agreement of this transportation project is finalized, South Korea would be a new addition to CKI's investment regions which include China, Australia and Canada etc. Such project will complement our globalization strategy and will enrich our transportation portfolio."

"With the presence of French President Mr Chirac as a witness, and the participation of the concerned provincial and city governments, it is evident that both the French and the South Korean governments are very serious about the Pusan-Koeji project. South Korean government's subsidy and income guarantee condition further enhance the attractiveness of the project. This is a project we would not want to miss. We will work hard to bring this project to fruition. It will be a new milestone for CKI," commented Mr Kam.

Cheung Kong Infrastructure Holdings Ltd (1038) is a constituent stock of the Hang Seng Index. It is the largest diversified infrastructure company in terms of market capitalization in Hong Kong and is one of the largest investors in China's infrastructure sector. CKI's three core businesses are infrastructure materials, energy and transportation. The company has investments in Hong Kong, Mainland China, the Phillippines, Australia, and Canada.

French corporation, Group GTM, was set up in 1891 and is mainly involved in construction and related services. Major business areas include concessions, civil engineering works, road building etc. The company has extensive experience in the field of infrastructure construction and concession.

South Korean Daewoo Corporation was set up in 1963 and is one of the leading infrastructure and construction companies in Korea. The company is mainly involved in construction, real estate, and civil engineering. When the company got the ISO9000 certificate in 1993, it is the first Korean company to get the accreditation. Daewoo Corporation has extensive experience in construction and has participated in projects in many countries, including those of US, Japan, Taiwan, Malaysia, Cameroon and Iran. In July last year, Daewoo completed the construction of Number 18 Highway in Vietnam.