PROJECT APPRAISAL AND FINANCE

REPORT On

Hangzhou Bay Bridge, China

Submitted By: Himanshu Dhoot 11BSP0282 DIVISION B

PROJECT DESCRIPTION
The Hangzhou Bay Sea-crossing Bridge is the worlds longest bridge over ocean waters. Its total length is 36 km in total length, of which 35.7 km is bridge. A great number of new techniques, new materials, new equipment, and new theories were adopted in the overall design of Hangzhou Bay Sea-crossing Bridge due to the large scale of the project, as well as complex hydrological, meteorological, geological, and sea erosive conditions which provided impetus to the innovation of bridge technology and design in many regards. The Hangzhou Bay Sea-crossing Bridge is a component of the national trunk line in the highway network of Chinas Five and Seven arteries in south-north and eastwest directions. It provides the most convenient way across the Hangzhou Bay on the highway from Shenyang to Haikou. The bridge is also an important component of highway network proposal of 2 transverse and longitudinal trunk lines separately, 18 link roads, 3 loop highways and 3 road corridors before 2010 in Zhejiang province, and thus will effectively connect the southeast cities of Ningbo and ZhouShan of Zhejiang province with Shanghai to reduce driving time to under two hours. The project starts from ZhengJiaDai of JiaXing city, crosses Hangzhou Bay and ends at ShuiLu Bay of Ningbo city (Below). It consists of a north link road, north approach viaduct, north channel bridge, middle approach viaduct, south channel bridge, offshore platform, south approach viaduct, and south link road. More than 70 special studies were carried out to provide scientific validation in preliminary design stage for the final plan of the bridge with regard to construction conditions, construction plan, safety, and durability of the structure. This provided a solid foundation for the successful implementation of the project. Architecture, design and structure The Hangzhou Bay is a gulf in the East China Sea where one of China's natural wonders, the Qiantang River Tide, creates fast water and large waves. The area is also a typhoon prone zone. These factors made construction feasibility a major concern for the project and the plan was only finalised after nine years of consultation and over 120 technical studies with the help of more than 700 experts from throughout the world. The cable-stayed bridge design was selected for the project as it can withstand the adverse conditions, multi-directional currents, high waves, and geologic conditions at the site. The bridge structure has also been designed to seismic criteria and will retain integrity in earthquake conditions up to seven on the Richter scale. The 36km length has highway-class road with six, 3.75m lanes, three in each direction. The overall width of the bridge is 33m. The roadway grade at cross-slope is 2% and a maximum 4% at longitudinal slope. Designed for 100 years of service life, the bridge has speed limits of 100km/h for the main spans and 120km/h for land approaches. The bridge has a height of 62m, enabling fourth and fifth generation container ships to pass through in all conditions. The total length of cable used in the project is 32.2km.

Project Cost
Of the total project cost of CNY11.8bn ($1.42bn), approximately CNY149m ($18m) was contributed by 17 non-governmental enterprises in the province. Around 35% of this amount was raised from private companies in Ningbo; 59% was provided as loans from Chinas central and regional banks. The Songcheng Group is the biggest non-governmental shareholder in the project with its investment accounting for 17.3% of the basic capital. Construction of the sea-crossing bridge is an indication of Chinas increasing economic power, and it is expected to boost economic development in the Yangtze River Delta, also called the Golden Industrial Triangle. The officials expect to recover the capital costs of the project in 15 years.

Technical arrangement
Of the total project cost of CNY11.8bn ($1.42bn), approximately CNY149m ($18m) was contributed by 17 non-governmental enterprises in the province. Around 35% of this amount was raised from private companies in Ningbo; 59% was provided as loans from Chinas central and regional banks. The Songcheng Group is the biggest non-governmental shareholder in the project with its investment accounting for 17.3% of the basic capital. Construction of the sea-crossing bridge is an indication of Chinas increasing economic power, and it is expected to boost economic development in the Yangtze River Delta, also called the Golden Industrial Triangle. The officials expect to recover the capital costs of the project in 15 years. China Railway Bridge Bureau Group Co. Ltd. was the main contractor for the project. The contract for consulting and engineering services was awarded to Hardesty & Hanover, LLP. ICE participated in the project by the use of three ICE V360 tandem vibratory pile drivers to produce the foundations for the bridge in the middle of Hangzhou Bay. Ty Lin International was the designer of the bridge. Ben C Gerwick provided ship impact protection systems for the bridge.

Market Analysis
As one of the areas leading China's industrialization, urbanization and internationalization, the Yangtze Delta Economic Circle at the mouth of the Yangtze River -covering Shanghai, the southern part of Jiangsu Province and the northern part of Zhejiang Province - has played an important role in China's economic resurgence. Although the area has only 10.4% of China's population, it accounted for 22.1% of the country's GDP last year, 24.5% of the country's revenues and 28.5% of the country's import and export volume. Southern Jiangsu: Situated on both the north and south banks of the mighty Yanze River, Jiangsu has deepened its river lane to accommodate larger container lines and freighters. Among the key cities of the southern part of Jiangsu province are Suzhou (GDP $25.2 million), Wuxi (GDP $19.4 million), and Nanjing (GDP $15.7 billion). (Jiangsu had planned a long bridge linking its city of Nantong to Shanghai for a long time).

Northern Zhejiang: Economic growth is also apparent in Zhejiang province, where five cities accounted for over $10 billion in GDP in 2002: Hangzhou, Ningbo, Wenzhou, Shaoxing, and Taizhou, often referred to as the "Five Little Dragons" of Zhejiang. Zhejiang has a disproportionate number of businesspeople and entrepreneurs. Many prominent and successful businessmen in Hong Kong and Shanghai trace their roots to Ningbo, which is now an economic leader, with the highest per capita volume of housing purchases in China. More than half of China's leading brands of shirts, men and ladies' apparels are made in Zhejiang. Zhejiang leads all Chinese provinces in the production of motorcycles and washing machines. Shanghai: Shanghai's estimated year 2002 GDP was $65.5 billion - the highest in the country and more than 80 % higher than Beijing or Guangzhou (which ranked second and third). Shanghai hosts the regional headquarters of more than 300 Fortune 500 firms, in most cases including head administrative offices and financial management centres. However, the production facilities belonging to those Shanghai regional headquarters spread from Shanghai to Southern Jiangsu and Northern Zhejiang and into the very heartland of China. It is very remarkable that the giant bridge would be the grandest infrastructure construction so far undertaken in China based on huge investment from the non-governmental sector. Total investment, all from enterprises in Zhejiang, is estimated at more than RMB 11.8 bn (US$ 1.42 bn), with 50.25% coming from private business. "This signals that the grand construction projects which used to be monopolized by State investment are from now on going to be wide open to non-governmental capital," said Xi Jinping, secretary of the Zhejiang provincial Party committee. One reason that this huge project is completely financed by Zhejiang enterprises might also be the fact that there has been a great deal of competition between Shanghai and other cities. It is true that there have been efforts to coordinate and cooperate, as for example in projects trying to link transportation, human resources, and administrative services systems into one huge Delta Region. Ultimately, however, there has been a great deal of mutual exclusivity. Just consider that the Hangzhou Bay Bridge connects Cixi, Ningbo (with its deep sea port, Beilun) to Jiaxing, a Zhejiang city just south of Shanghai city's administrative zone. On the northern coast of the Hangzhou Bay it has to be Jiaxing, because the city of Shanghai would not permit it to land in its territory. The expensive detour from Beilun to Southern Jiangsu and Shanghai along the coast of Hangzhou Bay has been an obstacle for economic development in the region.

Expected Traffic and Revenue

As designed, the bridge will be completed in five years and open for traffic in 2009. By then, daily traffic volume on the bridge is estimated to reach about 52,000 vehicles per day. The figure is expected to increase to 80,000 by 2015, and 96,000 by 2027. Apart from facilitating transportation, the bridge will also become a tourist attraction. A 10,000 sqm platform in Cixi (currently the project's construction base) will provide hotels, restaurants, gas stations and a look-out for enjoying a view of the tides. Those attractions will provide investor return, as will the bridge's toll fees. Investors will realize an 8.03 to 10.1% rate of return over a 14.2-year period, project officials anticipate.

Current status
Preparatory work started on the bridge as far back as 1994. Construction work began in June 2003 and was completed in June 2007 and an opening ceremony was held on 26 June. Several tests and evaluations were conducted for about one year before official opening. The bridge was opened to the public in May 2008 and carried about 50,000 vehicles per day in its first year of operation.