[Beijing] CBBC BRI workshop on “Tendering Processes & Bankability in Regulated Countries”

2017, August 21
[Beijing] CBBC BRI workshop on “Tendering Processes & Bankability in Regulated Countries” 21st August 2017

After the successful launch of CBBC’s latest report on the Belt and Road Initiative (BRI), an insightful workshop was held by CBBC/The British Chamber of Commerce in China on Public Tendering Processes and Bankability for Infrastructure projects in Regulated Countries at CHINCA’s (China International Contractors Association) offices in Beijing on the 9th of August 2017. CBBC and CHINCA – a key partner for the event, worked together to invite a select group of 21 Chinese construction companies and 15 leading UK companies with a background in financial, technical, legal, tax/accounting, construction, risk assessment and standards services, all of whom are active in regulated countries.

There were keynote speeches by Mr. Stephen Ellison (Department for International Trade China – Director for Energy, Environment and Infrastructure), Mr. Fang Qiuchen (CHINCA [China International Contractors Association] – Chairman), Mr. Yu Guangsheng (CAITEC [Chinese Academy of International Trade and Cooperation] – Vice President), Simon Spooner (Atkins – Director), Jeff Astle (CBBC – Executive Director) and David Prat (CBBC – Lead Director for Energy, Environment and Infrastructure). The speakers opened the event by addressing the importance of the UK and China’s continued cooperation and outlined the focus of the Workshop.

Mr. Jeff Astle of CBBC said: “This last year, we have seen substantial development around the BRI, where Britain is getting recognition and credit for being a leading partner with China and we would like to see further cooperation and development”.

Mr Simon Spooner of Atkins said: “Early engagement with advisory companies is crucial to maximise comparative advantages and gains, through focusing on risk management and quantitative methods.”

This Workshop was aimed at creating new avenues of collaboration between UK and Chinese companies and discussing the knowledge and skills necessary where putting forward compliant bids, as well as raising local financing for public infrastructure projects in countries with developed regulatory frameworks and financial markets. Awareness of the relevant steps, processes and requirements is becoming increasingly necessary where Chinese companies are entering into shareholding agreements with local partners and gradually moving from the familiar role as engineering, procurement and construction (EPC) contractor into that of an EPC+O&M (“Operating & Management”) contractor. Examples of such regulated countries include the UK, EU member states, the Philippines, Indonesia, Malaysia, Mexico and Brazil, among others.

The Workshop’s presentations were delivered by 4 leading UK advisory companies, as follows:

RICS (Royal Institute of Chartered Surveyors) emphasizsed the importance of being aware and taking into consideration the local, and sometimes international, rules and regulations on infrastructure and buildings standards in third-countries.

Atkins presented its experience and lessons learned in assisting both Chinese and international parties on energy, environment and infrastructure projects as well as underlined, amongst other aspects, the substantial long-term added-value and cost reduction potentially achievable through early stage project planning and due diligence.

KPMG shared with the audience the considerable value and importance of financial planning, project valuation and cost controlling through the building and continued use of appropriately structured and detailed financial models. This being especially the case where raising long-term equity and/or debt funding from international and third-country institutions/partners.

Pinsent Masons dissected and explained the key differences between the typical build-operate-transfer (BOT) and the design-build-finance-operate (DBFO)/ public-private partnerships (PPP) models with the latter being widely used in regulated countries. They also explained the differences in risk allocation between both models, how this is relevant to Chinese companies increasingly taking equity stakes and O&M positions in third-countries and the chief points to consider when negotiating the key project contracts.

After the Workshop, attendees broke off into three round tables that covered the subjects of “Bankability”, “Due Diligence” and “Public Tendering”. This successfully provided a UK-China B2B matchmaking environment and opportunities for the attendees to conduct interesting and detailed, one-to-one or group conversations.

The feedback received from attendees was extremely positive. One workshop participant said: We believe that the knowledge gained today was useful in understanding key processes in projects and the different functionalities different UK companies can provide”.

Another participant declared: “The event provided a good and comprehensive introduction to the complexities of PPP in these [regulated] countries”. Apart from the workshops themselves, another aspect of the event was the networking between Chinese and UK companies: “We got to know major Chinese contractors and potential partners”.

This Workshop was one of the events CBBC has been developing after the launch of “Belt and Road Initiative-Southern Routes: UK-China Cooperation and Opportunities” report, which CBBC and CAITEC jointly released for the occasion of the Belt and Road Forum for International Cooperation that took place in Beijing in May 2017. Such report and events have been supported by CBBC’s valuable sponsors, Sanpower, Atkins and ABP.

CBBC, through its BRI Programme, is committed to linking Chinese and UK companies and institutions in their common endeavour of delivering and building Belt & Road Initiative, initiated by China in 2013, and fostering international development and growth.

To learn more about the subject and CBBC’s activities, please contact:

David Prat (大衛)  – Lead Director Energy, Environment and Infrastructure
e-mail: david.prat@cbbc.org.cn
Mobile: +(86) 182 1079 6447

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