Hangzhou Bay Bridge sets stock market precedent

The Hangzhou Bay Cross-Sea Bridge – located in East China's Zhejiang province – has become the first cross-sea bridge in China to be listed on the stock market as a Real Estate Investment Trust or REIT.

In the process, it's raised over 8.08 billion yuan ($1.1 billion) in funding, marking a significant move towards integrating private capital into large-scale infrastructure projects.

Spanning 36 kilometers, the bridge connects Ningbo and Jiaxing in Zhejiang, becoming a key transportation link that has greatly shortened travel time between Shanghai and Ningbo.

Before the bridge, travelers had two options – a long and hazardous sea route or a lengthy detour through Hangzhou, capital of the province. The bridge, completed in 2008, has transformed the region's logistics.

The idea of building the bridge arose in the early 2000s when Ningbo, struggling with limited public funds, partnered with private companies to raise the necessary capital. Most notably, companies like Fotile and Huanchi Bearing Group took part in the groundbreaking initiative, which set a precedent for private investment in public infrastructure projects.

Since its completion, the bridge has seen a dramatic increase in traffic, now handling over 37,000 vehicles per day, compared with just 28,000 in its first year.

The accumulated toll revenue has reached nearly 20 billion yuan annually, creating a robust financial foundation for the bridge's future operations.

The listing of the bridge's assets as a REIT on Dec 26 is expected to allow for continued investment in its maintenance and expansion while helping fund future infrastructure projects, including the Suzhou-Jiaxing-Ningbo railway.

"The REIT is designed to create more investment opportunities," said an official from the Ningbo municipal development and reform commission.

"This financial innovation is expected to further boost private capital involvement in infrastructure, optimizing investment and expanding economic potential in the region," the official added.

Others are also bullish about the prospects. "The financial market's bold approach can be a huge boost for local development," said Zhang Handong, a regional economist.

"The success of the Hangzhou Bay Cross-Sea Bridge REIT shows that with the right conditions, private capital can drive the growth of critical public infrastructure," Zhang added.