1. What’s the vehicle category mix on Qinglian Expressway at present? What’s the proportion of passenger cars and cargoes?

As Qinglian Expressway has adopted expressway toll rates since 1 July 2009, there is a significant growth in small-size vehicles on Qinglian Expressway. During July 2009 to September 2009, the proportion of traffic volume in Class 1 vehicles accounted for nearly 50% while the proportion of traffic volume in Class 4 and Class 5 vehicles accounted for 15%. At present, the proportion of passenger cars and cargoes is about 65:35.

2. How is it going for the reconstruction into expressway of Qinglian Project (“Liannan Section”)?

The design and approval have been completed as well as controlled land requisition, demolition and relocation work. The construction of road surface has been started and a labor competition of “hundred days in dry season” launched since August in order to move full construction scheme ahead. The road surface works is planned to be completed in early next year and will resume full opening to traffic then. The whole reconstruction work is planned to be completed in two years.

3. How does the expansion of Meiguan Expressway and Shuiguan Expressway progress? Would the concession be extended after the expansion of Meiguan Expressway?

The water and soil conservation proposal for the expansion of Meiguan Expressway has been officially approved by the Department of Water Resources of Guangdong Province, and the inquisitional procedures for project land use are underway. Since the expansion proposal for the section south to Qinghu is subject to adjustments, the Company intends to divide the project into south and north sections for separate construction. The construction is planned to be commenced in the first half of next year. Preliminary design for the expansion of Shuiguan Expressway has been approved by the Development and Reform Commission of Guangdong Province, and the expansion work will be undertaken by Qinglong Company. The Company will apply to the relevant departments of government for extension of concession for expansion project and the result will be determined by the government.

4. How is the Coastal Expressway (Shenzhen Section) processing? Does the Company need to advance capitals for the project?

The land requisition, demolition and relocation works of Coastal Expressway were basically completed, and the project commencement report has been approved. The relevant works are progressing as planed.
Shenzhen municipal government has set up the Yanjiang Project Company through Shenzhen Investment Holding Corporation. The Company is actively conducting negotiations with Shenzhen Investment Holding Corporation in order to implement the specific details of entrusted construction and operation management.
The Company will be responsible for the construction and operation management of the project and the Company doesn’t need to advance capitals for the project.

5. When will the operating performance of Nanguang Expressway achieve the anticipated result?

Both of traffic volume and toll revenue of Nanguang Expressway has recorded an upward tendency since it opened to traffic. In September 2009, it’s average daily toll revenue is about RMB360,000. Upon completion of Nanping (PhaseⅡ), Nanguang Expressway will be connected with Shenzhen-Hong Kong Western Corridor and the Shenzhen western port area, and will play an important role in prompting the traffic diversion from the ports. It’s expected that the traffic volume would have a substantial improvement and the proportion of small-size vehicles would relatively increase then.

6. When will depreciation method be changed from the units-of-usage method to the straight-line method? How would the results be impact if the Company adopts the straight-line method?

The Company is currently adopting the units-of-usage method to accrue the roads’ depreciation and amortization. The differences of counting depreciation and amortization between the units-of-usage method and the straight-line method have been disclosed in our interim report and the annual report since the 2008 Interim Report. The adoption of different depreciation and amortization methods had no impact on the cash flows generated from toll highways and thus had no impact on the valuations of various projects. The Company will keep adopting the units-of-usage method until the accounting standard change.

7. What’s the capital expenditure plan for the next few years including the equity acquisition cost of Jihe East and expansion costs of Meiguan Expressway and Shuiguan Expressway?

From the second half of 2009 to the end of 2012, the Group’s total capital expenditures including the acquisition cost of Jihe East amount to approximately RMB 3.8 billion.
Apart from the aforementioned amount, if the expansion plans of Meiguan Expressway and Shuiguan Expressway will be eventually implemented, the amount of total capital expenditures would increase by 1 to 1.2 billion

8. Will the Company’s dividend payout policy be changed?

Company has been emphasis on shareholder’s returns and will maintain a stable dividend payout policy.