New World Development Company Limited
EXECUTIVE VICE-CHAIRMAN’S REPORT
10
Infrastructure
Riding on the economic development in the Pearl River Delta Region and implementation of toll-by-weight policy since
June 2015, all the expressways in Guangdong registered growth in both traffic volume and toll revenue. Toll revenue
of Hangzhou Ring Road grew by 2% despite a 1% drop in traffic volume. The improvement works to alleviate the
bottleneck in the western section during peak hours will be completed in the second half of FY2016. Average daily traffic
flow of Tangjin Expressway (Tianjin North Section) surged by 58% due to the resumption of two-way traffic after the
completion of expansion works in December 2014 and traffic diversion from the temporary closure of a competing road
following the local explosion incident in August 2015.
Notwithstanding the decline in fuel prices, weakening electricity demand, competition from renewable energy and
rigorous emission controls continued to exert pressure on coal-fired power plant operators. Electricity sales of both
Zhujiang Power Plants and Chengdu Jintang Power Plant fell by 19% during the period under review. In January 2016,
the average coal-fired benchmark on-grid tariff in Mainland China was cut by RMB0.03/kWh or 7%.
Sales volume of Chongqing Water Plant and Jiangsu Water Company increased by 7% and 13% respectively during
the period under review. In Macau, sales volume of Macau Water Plant grew slightly by 1% and a tariff hike of 4.3%
became effective in October 2015.
Pursuant to the agreement between Chongqing Water Assets Management Co., Ltd and a joint venture with Suez
Environment, NWS Holdings Limited (“NWSH”) attained an indirect interest of 12.55% in Chongqing Derun Environment
Co., Ltd (“Derun Environment”), a RMB30.0 billion platform to invest in environmental-related business in Mainland
China in December 2015. The consideration for the interest in Derun Environment was substantially met by the injection
of NWSH’s indirect interest in Chongqing Water Group Co., Ltd. Accordingly, NWSH shared a deemed disposal gain of
HK$179.3 million during the period under review.
To capture the growing demand for air transportation, NWSH entered the commercial aircraft leasing business by
acquiring 40% equity interest in Goshawk Aviation Limited (“Goshawk”) in February 2015. As evidenced by Goshawk’s
fast expanding fleet that grew from 27 aircrafts at time of acquisition to 53 aircrafts as at 31 December 2015, this
business will serve as an important growth impetus for NWSH in the years to come.
Throughput handled by Xiamen Container Terminal Group Co., Ltd. (“XCTG”) reached 4,079,000 TEUs for the current
period, representing a healthy growth of 12%. Following the acquisition of 6.2% interest in September 2015 as
previously reported, NWSH’s stake in XCTG has increased to 20%.
With the introduction of containerized break-bulk cargoes transportation in January 2015 and the increasing demand for
international block train services, throughput handled by China United International Rail Containers Co., Limited grew
6% to 979,000 TEUs during the period under review. To meet the business growth, the expansion works to double the
handling capacity at Chongqing terminal were completed in December 2015 while the new Tianjin and Urumqi terminals
are scheduled to be completed in 2016 and 2017 respectively.
ATL Logistics Centre continued to register strong growth as average rental increased by 16% in the period under
review, which was partly boosted by the rental adjustment of a major tenant. Its occupancy rate decreased from 99.5%
to 97.8% due to transitional vacancy upon lease renewals during the period under review.
