TEN subsidiaries of local developer Singapore White Group on Friday signed contracts for the first phase of a massive $12 billion project to build a large township in the western Chinese city of Zhangye.

The project in the city located in Gansu province will span 18.97 sq km and will be developed over four phases.

Work will start next month for the first phase to develop 38,000 flats - modelled after Singapore's housing board flats - and an international country club which will include a family safari park and golf course.

The homes will be sold to the locals.

The $2 billion first phase will take about two years to complete, said Mr Peh Chin Hua, founder of the White Group and a former Member of Parliament for Jalan Besar GRC.

A number of China townships have been built with the assistance of Singapore's government or companies over the years, such as the Suzhou Industrial Park, Tianjin Eco-City and Sino-Singapore Guangzhou Knowledge City. But these have tended to be located more towards the more developed eastern coast of the mainland.

The investment is the first one in Zhangye, and one of the first in western China, by a Singapore firm.

Mr Peh himself has had 21 years of experience in developing housing projects in China, in cities like Qingdao, Shenyang and Tianjin.