China Railway constructs parent company over 2 billion to take over Saudi project

The $ more than 4 billion Saudi project loss was retained in the accounts of China's CRCC (601186), which had suffered huge losses in its earlier catalogue of light rail items in Saudi Mecca. sh;01186.　　HK) recently announced that the company and the controlling shareholder of China Railway Construction Corporation signed an agreement, for which China Railway Corporation will pay 2.077 billion yuan to the Chinese railway construction, the construction of the Chinese railways in the project since October 31, 2010, in addition to the loss of all losses or profits.　　This also means that, since October 31, 2010, China Railway Corporation will exercise and fulfill all the rights and obligations of China railway under the general contract and due to the general contracting contract, the Chinese CRCC will no longer bear the risk of late implementation of the project and lock the maximum loss of the project.　　However, the notice also pointed out that in accounting, China Railway construction as at October 31, 2010, the cumulative net loss of 4.148 billion yuan, will remain in the company 2010 and the previous year's profit statement. The Saudi Mecca light rail project has been in operation in November 2010 and is currently in the process of continuous propulsion and will be completed in May 2011 with a total of 100% shipments.　　China CRCC will also be responsible for three years of operation and maintenance of the project in accordance with previous general contract agreements.　　According to the announcement, the Chinese railway construction of the Saudi Mecca light rail project as at October 31, 2010, the exchange rate, the contract is expected to be 12.051 billion yuan, the total cost is estimated to be 16.045 billion yuan, plus financial costs, the project is expected to net loss of 4.148 billion yuan.　　In addition to taking over the rights and obligations of project follow-up, China Railway Construction Corporation has reached an agreed arrangement with the Chinese iron Establishment on the claim income, if claim income less than 1.385 billion yuan, all of which are owned by China Iron Construction, to fill the loss vacancy.　　If the claimed income is higher than 1.385 billion yuan but less than 3.462 billion yuan, the Chinese iron construction enjoys 1.385 billion yuan, the rest is owned by China Railway Construction Corporation, which is used to compensate for the price paid by the National Railway Construction Corporation.　　If the claimed income is above 3.462 billion yuan, then the Chinese iron construction enjoys 1.385 billion yuan, China Railway Construction Corporation enjoys 2.077 billion yuan, the remaining part, if China Railway construction company in the later stage of the project losses, then used to make up for the loss of the National Railway Construction Corporation, and if there is still surplus after the loss, then all returned to the Chinese iron construction enjoyed　　However, in accounting, the company said that the above project as at October 31, 2010 of the cumulative net loss of 4.148 billion yuan will be retained in China CRCC 2010 and the previous year's profit statement, the reverse of the contract expected losses and the funds paid by the Central Railway Corporation is counted as "capital reserves."　　China CRCC before the announcement, in January-September the company achieved net profit of 2.018 billion yuan, down 45.11% year-on-year, 0.16 yuan per share, down 46.67% year-on-year. China Railway Construction A and H-shares have been suspended for a significant matter since January 20, with a 7.17 yuan and HK $9.72 before the suspension.