in Singapore Suzhou project to hit US$90 million
AGENCE FRANCE-PRESSE in Singapore
September 15, 1999
RELATED: The Suzhou saga
SINGAPORE'S flagship industrial park project in China is expected to post accumulated losses since 1994 of US$90 million by the end of 2000, the Straits Times reported Wednesday.
The developers of the Suzhou Industrial Park (SIP), the China-Singapore Suzhou Industrial Park Development Co., said in Suzhou Tuesday average yearly losses amounted to US$23 toUS$24 million since work on the park began five years ago, according to the report.
Lim Neo Chian, chief executive of the development company gave the figures in a briefing to Singapore Deputy Prime Minister Lee Hsien Loong.
Lee is leading a delegation to Suzhou to meet with their Chinese counterparts to discuss progress of a flagship industrial park there.
However, officials were optimistic that the park would turn in a profit soon.
"In the start-up years, it is natural they may incur some losses," said Chinese Vice-Premier Li Lanqing, ho co-chaired the meeting with Singapore's Lee.
"I'm confident the SIP will be profitable some time in the future."
Singapore's statutory boards and government-linked companies have invested US$147 million in the park.
The report said the Chinese and Singaporean sides also endorsed an agreement signed here in late June, in which the Singapore consortium is to scale down its shareholding in the park's development company, and transfer management control to the Chinese consortium.
The Singapore consortium will lower its stake to 35 percent in January 2001 from 65 percent now, raising the Chinese consortium's stake to 65 percent from 35 percent.
The agreement resolved a row over the development of the SIP, which was then facing competition from a rival project backed by Chinese officials known as the Suzhou New District.
Launched in February 1994, the SIP is expected to be an efficient and ultramodern Singapore-style industrial township in Suzhou hosting multinational firms setting up in China.
At the end of May, 133 projects worth US$3.76 billion had been committed to the SIP, which it is estimated will cost US$20 billion to US$30 billion over 20 years.