Press Release for the Contract Signing Ceremony of the National Stadium Project

The grand contract signing ceremony for the National Stadium Project main stadium of the Beijing 2008 Olympic Games was held in the Great Hall of the People. On August 9, 2003, the People's Government of Beijing Municipality held the grand contract signing ceremony for the National Stadium Project- main stadium of the Beijing 2008 Olympic Games in the Great Hall of the People. The CITIC consortium is determined to be the successful bidder for the National Stadium Ownership Tender. Mr. Liu Jingmin, Vice Mayor of Beijing Municipality and vice Chairman of BOCOG was present at the ceremony and delivered a speech.

Liu Jingmin, first, expressed his warm congratulations to the success of the National Stadium Ownership Tender and the successful bidder, the CITIC consortium. He pointed out that the contract signing for the National Stadium Project marks another firm step forward in the preparation for the 2008 Beijing Olympic Games venues construction and is a great event in the preparation for the 2008 Beijing Olympic Games as well as an instructive attempt in the investment and financing system reform in Beijing. He hoped that the CITIC consortium would fully demonstrate the concepts of "Green Olympics, Hi-tech Olympics and People's Olympics" in the design and construction, and build the National Stadium into a world top-ranking stadium with first-rate design, first-rate construction quality and first-rate management team.

Mr. Yan Zhongqiu, Deputy General secretary of Beijing Municipality announced the successful bidder for the National Stadium Ownership Tender, which is the CITIC Consortium represented by the CITIC Group with its members being Beijing Urban Construction Group Co., Ltd, Golden State Holding Group Corp. and GuoanElstrong Ltd. subsidiary of the CITIC Group.

At the contract signing ceremony, the CITIC Consortium signed the three contractual agreements: Concession Agreement, National Stadium Agreement and Joint Venture Contract respectively with the People's Government of Beijing Municipality, BOCOG and Beijing State-owned Assets Management Company, Ltd. The Project Company will be jointly incorporated by the CITIC Consortium and Beijing State-owned Assets Management Company, Ltd. The CITIC Consortium will be responsible for the design, investment & financing (excluding the financial contribution from the Municipal Government), construction, operation and transfer of this Project. The Project Company will acquire a 30-year operation right for the National Stadium starting from the end of the Olympic Games in 2008.

According to the introduction of Beijing Development Planning Commission(¡°BDPC¡±) - Executing Organization of the Tendering Authority, thirty-five competition venues as well as such large auxiliary facilities as the Olympic Village and Conference Center will be planned to use for the 29th Olympic Games in Beijing. Fifteen of these venues will be newly built and eleven will be improved or rebuilt. It requires us to explore new ways of thinking and take new actions of government investment and financing in order to utilize to the largest extent social forces for raising the funds for stadium construction, consider fully the post-Games utilization and give full play to its social benefits and investment benefits. For this purpose, Beijing Municipal Government put forward the fundamental line of thinking, which is "seeking new fund raising and financing methods and fulfilling the market-oriented financing work for this Olympic Games". The State Council and IOC have fully affirmed the basic principle of implementing project ownership tender for new stadium projects and related facilities.

Authorized by Beijing Municipal Government, BDPC is responsible for the ownership tender for the National Stadium, National Indoor Stadium, National Swimming Center and the related facilities of the Conference Center and Olympic Village, and entrusted by the People's Governments of Haidian District and Shunyi District, is in charge of the ownership tender organizing work for the Wukesong Cultural and Sports Center, Shunyi Olympic Aquatic Park and Beijing Country Equestrain Park.

The National Stadium is the main stadium for the 2008 Olympic Games and a landmark inside the Beijing Olympic Green as well as the largest multi-functional stadium with internationally-advanced standards in Beijing. Due to the specialty of National Stadium and by reference to domestic and overseas experiences of the similar projects, the Municipal Government provides 58% of total investment as funds support to this project to reduce the financing cost and operating cost of the project. Beijing State-owned Assets Management Company Ltd has been entrusted to invest the funds on behalf of the government into the Project Company. The investment, apart from the financial contribution from the government, will be settled through market-orientated operation mechanism and international competitive bidding has been adopted for the selection of the National Stadium Project Ownership cooperative party who has signed the Joint Venture Contract and will incorporate the Project Company jointly with Beijing State-owned Assets Management Company Ltd. The Project Company is in charge of the design, investment & financing (excluding the financial contribution from Government), construction, operation and transfer of the Project.

The project ownership tender has adopted the mode of "one tender, two steps". Firstly,

the "Pre-qualification and Call for Expression of Interest" was conducted and the bidding qualification, construction conceptual plan, financing conceptual plan and operation conceptual plan of numerous applicants had been evaluated. The pre-qualification process short listed 5 qualified applicants, who were invited to bid and submitted their optimized design plan, construction plan, investment & financing plan, operation plan and transfer plan for comprehensive evaluation. Ultimately the successful bidder has been determined.

Only 9 months have been taken to complete the National Stadium Ownership tendering process, it took as about half the time as the similar projects of international tendering. Above all, all the bidders have done their best to overcome the adverse impact of the ¡°SARS ¡±epidemic, ensure the completion of the tendering process and create the advantageous conditions for the project to start by the end of this year. The whole tendering process has strictly followed the Tendering and Bidding Law of China and relevant laws and regulations and has been implemented according to the laws. The Supervisory Committee for the 29th Olympiad supervised the whole process and ensured that the ITB process is open, fair and transparent.

It is described that the National Stadium is the first project to decide the successful bidder and to sign the contracts among a number of Beijing Olympic venues ownership tender projects. The ownership tender of the other projects are also well under way and the successful bidders of all these projects will be decided before the end of October.

Liu Zhi, Vice Director of Beijing Development Planning Commission hosted the contract signing ceremony. Present at the contract signing ceremony are also Mr. Wang Wei, Vice Chairman of BOCOG, Mr.Zhang Xiaoqiang ¨C General Secretary of State Development and Reform Commission, Ms. Chen Xiaoli, General Planner of Ministry of Construction and leaders from relevant departments.