A Belt and Road workshop was successfully held at CBBC’s Shanghai offices on Public Tendering Processes and Bankability for Infrastructure Projects in Regulated Countries. CBBC partnered with the Shanghai Municipal Commission of Commerce and CCPIT (China Council for the Promotion of International Trade) and together invited a selected group of 22 of the largest Chinese construction companies and 15 leading UK companies that offer financial, technical, legal, tax/accounting, construction, risk assessment and standards services, all of them active in regulated countries.
There were keynote speeches from Mr. John Edwards (British Consulate – Consul-General), Ms. Liu Huaqin (CAITEC [Chinese Academy of International Trade and Economic Cooperation] – Vice Director), Mr. Simon Spooner (Atkins – Director), Mr. Jeff Astle (CBBC – Executive Director) and Mr. 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 partnership and set out the specific focus of the Workshop.
Mr. John Edwards, British Consul-General, stated that: “As China rolls out the Belt and Road Initiative, companies will have to adopt the commercial procedures and models relevant to the different markets. They will need to engage more actively at the feasibility stage. And they must build up the specialised knowledge and experience to comply with all the rules around public tenders and local financing for public infrastructure projects. This workshop, organised by CBBC, offers precisely that insight.”
Mr. Jeff Astle of CBBC noted that “British business has shown interest in the Belt and Road Initiative right from its inception, and here today we see that interest has remained consistent. At CBBC, we consider it vital to continue facilitating UK-China cooperation in third countries.”
This Workshop was aimed at creating new avenues of collaboration between UK and Chinese companies and discussing the knowledge and skills necessary when 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 starting to move 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 hands-on lectures were delivered by 4 leading UK advisory companies, as follows:
RICS (Royal Institute of Chartered Surveyors) emphasised the importance of being aware and taking into consideration the local, and sometimes international, rules and regulations on infrastructure and building standards in those 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 controls 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 BOT (build-operate-transfer) and the DBFO (design-build-finance-operate)/PPP (public-private partnership) models, the latter widely used in regulated countries, the differences in risk allocation between both models, how this is relevant to those 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, the attendees broke off into three round tables covering the subjects of “Bankability”, “Due Diligence” and “Public Tendering”. This successfully provided a UK-China B2B matchmaking environment and opportunities for attendees to conduct interesting and detailed, one-to-one or group conversations.
The feedback from workshop participants was extremely positive. Many were confident that they had made a number of useful contacts at the event. One attendee said that the knowledge gained during the event was “useful in understanding the potential challenges that other partners are facing in the Belt and Road Initiative”.
This Workshop was one of the activities and events CBBC has been developing after the release of the “Belt and Road Initiative-Southern Routes: UK-China Cooperation and Opportunities” report. This report was jointly released by CBBC and CAITEC for the occasion of the Belt and Road Forum for International Cooperation that took place in Beijing in May 2017. The report and related 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 as well as key institutions in their common endeavour of delivering and building the 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
Mobile: +(86) 182 1079 6447