1.Project background     Founded in 1983, the Administration Bureau of Tianjin Local Railway is mainly in charge of the unified planning, passenger and freight transport, survey, design and the projects construction. Some local railways are directly under the administration including Ligang Line, Jinnan Line, Zhoulu Line, Guangxu Line and Bieshan Line. Among the total length of 160.2 km, 117.61 km is formal line and 42.59 km is branch line. It takes on cargos transportation for Nanjiang Port of Tianjin Port and some national large-and middle-size key enterprises including Tianjin Oil Refinery, Dagang Power Plant, Dagang Oil Field, Dagu Chemical Plant, Dagang Chemical Fiber Factory and 140,000-ton Ethylene project. It handled freight transport volume of 10.76 million tons in the year of 2000.     Since the twenty-year development, Tianjin local railways have developed into a tentative scale, especially the implement of large-scale and strategic infrastructure investment during the Eighth and Ninth Five-Year Plan periods has laid a solid foundation for the further growth of local railway. With the coming new century, there will be a large developing space. According to the Tenth Five-Year Plan and the development planning in 2015, the local railways will put emphasis on satisfying the railway transport requirement of the "classification of the black & white" and the "north coal transporting southward" in Tianjin Port and the rapid development in Nanjiang Port areas. Great efforts are made to exert the special roles of local railways and comprehensive circulation center in the port. During the Tenth Five-Year Plan period, the local railways will be undertaken overall technological renovation and improvement.     2.Necessity and market forecast of the project     Tianjin local railways are the main passageways for the cargos collection, distribution and transportation. In order to adapt to the development of Nanjiang Port, it is imperative to renovate and expand the construction of local railways, which are the rear passageways for Nanjiang Port.      (1) The construction of local railways will better the investment environment on the New Coastal Area to fit the port development and to materialize the growing plan of Tianjin Port areas that is the strategy of "classification of black and white", and "north coal transporting southward". Located in the south and southeast of Tianjin, the local railways are the rail passageways linking national trunk lines with Nanjiang Port areas in Tianjin. They undertake the transportation of overall ocean shipping coal in Nanjiang Port. Tianjin local railways will shoulder heavy responsibilities and make jointly efforts to promote its prosperity as well as that of the Tianjin Port.      (2) The construction of local railways will urge the development of industrial areas near the Port. The planning and construction of industrial areas near Tianjin Port present the developing strategy of Tianjin industry moving eastward. With the constant emerging of new group industry, railroad passageways are the necessary assorted projects for the transport. Local railways can provide railroad transportation service for the boom of the industrial areas near Tianjin Port.     (3) Tianjin local railways are the important links between the Port and inland. The construction of the local railways will enhance the economic development of hinterlands. These hinterlands refer to the most part of the North and the Northwest China including all or part of the provinces, cities and autonomous regions like Tianjin, Beijing, Hebei Province, Shanxi Province, Inner Mongolia Autonomous Region, Xinjian Uygur Autonomous Region, Henan Province, Ningxia Hui Autonomous Region and Shanxi Province. Tianjin local railways improve the relations between foreign trade export and hinterlands by some national railway trunk lines like Jingshan Line, Daqin Line, Fengshada Line, Jingjiu Line, Jingpu Line and Jingguang Line. The import & export goods from Xijiang, Inner Mongolia and the outlying districts in the west are conveyed to the port wharfs and inlands by means of local railways each year. Tianjin local railways have made great contributions to the economic growth in the outlying districts. With the implement of the West Development policy, the transport volume from inland to the sea will go up and the growth of the local railways must present a prosperous scene.      (4) The developing plan of Tianjin local railways has been brought into the General Plan of Tianjin Railway Hub. It is the main part of making up the southeast ring line and the southwest ring line. The local railways will make the cargo transport routes more rational.     According to Tianjin General Planning and a long-range Development Plan of the New Coastal Area, Tianjin Port will be built into a modern international port. With the implement of strategy of "north coal transporting southward", the coal handling capacity will increase in Tianjin Port. The construction of bulk cargos wharfs, special coal wharfs and coal berths will make the local railways and Tianjin Port become booming. It is estimated that the total volume of local goods transport will reach 38.57 million tons in the year of 2005, 43.2 million tons in the year of 2010 and 45.83 million tons in the year of 2015. Based on the forecasting result, the long-range transport capacity will be 50 million tons.      3.Construction content and scale       (1) The expanding construction of the line from Liqizhuang to East Dagu Station and the first stage of technological renovation: the current line will be prolonged 62.2 km; No.2 line will be built during Jinbanqiao and East Dagu Station with the length of 22.5 km; expanding construction of East Dagu Station; 23.2 km of Zhoulu Line will be open to the traffic.     (2) The expanding construction of the line from Liqizhuang to East Dagu Station and the second stage of technological renovation: 20-km of road will be prolonged; the implement of 90.7 km of electrification.      4.Total investment and source of funds     Total investment: 597.13 million yuan Source of funds: the property owner unit is positively looking for its partners and funds are raised by cooperation, joint venture or the set-up corporation limited.     5.Progress Arrangement     The project in the first stage will be conducted in two years from 2001 to 2003. The project in the second stage will be completed during the Tenth Five-Year Plan period.      6.Analysis on finance and economic profit     The Financial internal return rate of the total investment: FIRR=9.76% ( higher than return rate of industry basis 6%) The period of recovery (including construction period): 11.94 years Economic internal rate of return: EIRR= 16.45% (12% higher than IS)      7.项目主要概况及项目当前进度、招商引资方式   In the first stage, No.2 line construction between Jinbanqiao Station and East Dagu Station and the expanding construction of East Dagu Station have been approved to take as items by Tianjin Development Planning Commission on Nov 7, 2000. The feasible research reports have passes the examination and approval on Feb. 9, 2001 and obtained formal document; Tianjin Construction Committee conducted further examination of the projects on May 11, 2001 and approved to go into operation on June 6, 2001. <The pre-feasible research report on renovation and expanding construction of Tianjin local railways> has passed the experts' evaluation of the relevant national departments and is submitted to State Development Planning Commission for the estimation and approval.     Mode of investment invitation:     1. The project will be jointly invested. It uses the mode of joint construction, mutual operation, sharing profit and risk. The party of property owner will invest part of funds and rights of using present land, equipments and facilities as shares to set up corporation limited with the cooperator. The share ratio of two parties is that the party of property owner will account for over 50% of total shares. But the detailed ratio can be decided by negotiation.     2. The project will be run by corporation limited jointly invested by independent body and cooperative party. The two parties share profit and risk according to the ratio of investment in the registered capital. The share ratio of two parties is that the party of property owner will account for over 50% of total shares. But the detailed ratio will be decided by the negotiation.