Ahead of Schedule and Below Budget

With plenty of experience from huge projects at home Chinese construction companies look to neighbors, Africa for opportunities. 

By MARK GODFREY

The Chinese garden built by the Chinese construction company in Malta is greatly appreciated by the local people.

CHINESE construction companies, sated with the huge projects which have redefined China’s urban landscape, are increasingly seeking work abroad. Local firms are already heavily involved in projects right across Asia and Africa and now richer countries are also within their sights. And work appears plentiful. This summer Zimbabwe’s government asked Chinese builders to help locals build affordable housing and provide heavy-duty equipment for road construction. Construction firms from China have been in Botswana for over a decade and it was Chinese firms that rebuilt large parts of Algeria’s infrastructure after a devastating earthquake in May 2003. State-owned Chinese firms are meanwhile busy in Pakistan constructing hydroelectric power plants to help that country avoid a looming energy crisis. 

Neighboring Afghanistan has also been visited by commercial delegations from Beijing: Leading Chinese construction companies said they are closely watching the situation in Afghanistan and have already joined in the reconstruction of Kabul and Herat, the country’s largest cities. “We’re closely watching what's going on. There’s a lot of projects since the war ended” said an official with the China State Construction Engineering Corp, the country's largest contractor of overseas projects. China Road and Bridge Group, another leading Chinese construction company, is also eyeing up major infrastructural deals that will be paid for with cash pledged by international donors. “We will definitely enter the market when the proper chance presents itself,” said Yao Haidong, deputy general manager of the group’s overseas development department.  

Chinese construction firms has shown an admirable ability to build major infrastructure projects cheaply and quickly. Beijing’s Fourth Ring road runs to over 65 km and cost less than its budgeted 7.26 billion yuan (about 870 million euros) price tag. By comparison, an infamously troublesome 30 kilometre bypass in the Irish capital Dublin has been several years in stop-start construction, with the strip of dual carriageway costing over 500 million euros so far to build. Beijing’s latest highway has eight lanes running in each direction. Two more ring roads will be added to the city’s four before 2008, when China hosts the Olympic Games. In the late 1990s the Beijing Municipal Government brought in a public-private style financing system when there wasn’t enough cash to build the roads the city desperately needed. A company was quickly established by city planners and charged with raising the cash and building the roads. The new company took complete responsibility for drumming up investment, financing the roads and then putting the work out to tender. The first product of the new system was a stunning success. Running to over 65-km-long, the Fourth Ring Road is serviced by 147 flyovers and overhead crossings. More than a dozen cable lines and 500 kilometers of pipelines were laid beneath the road to carry water, electricity, gas and heating. The whole huge project was finished and the road in use within three years, two years ahead of schedule.  

The high speed, high quality and low cost of construction of the Fourth Ring Road has aroused the attention of governments worldwide, according to Meng Xianlong, deputy director of the Control Center of the Beijing Traffic Administration Bureau. “Anybody is welcome to come and see our infrastructure and how we’re building high-quality modern transport systems. At the moment we’re concentrating on getting better. Advanced information technologies will be introduced to traffic control...so we keep vehicles moving faster.” 

An outdoor theatre built by China State Construction Engineering Corporation in Cote d’ivoire.

China is keen to compete for public works projects in Europe, offering to do the work cheaper and faster than local contractors. China’s president Hu Jintao told trade representatives travelling with his EU counterpart Romano Prodi earlier this year that he hoped Chinese companies would win bids for road and rail projects in Europe. The Chinese Government is pushing leading Chinese construction firms to vie with foreign rivals on their home turf now that China is a member of the World Trade Organization (WTO). “WTO membership has created more opportunities as more building markets across the world are going to be open to China,” said chief engineer with the Ministry of Construction, Jin Dejun.  

Chinese construction companies rank among the world’s largest multinational building firms according to a survey published in Engineering News Record, a trade journal published by McGraw-Hill. Judged according to revenue generated outside of each company’s home country in 2003 the survey ranks Sinohydro Corporation, Shandong Electric Power Construction Corporation and China Metallurgical Construction Corporation as three of the world’s big construction conglomerates. China Metallurgical has subsidiaries across Asia, as well as in Los Angeles, South Africa, Nigeria and Zimbabwe.  

All roads may be leading out of Beijing but the Chinese capital and other cities in China still need more roads and better public infrastructure. In a few years this colossal city will be home to three million cars. There’ll be ten million automobiles on these roads in twenty years time, the Beijing Municipal Government has predicted. Traffic planners and environmental experts hint however that no amount of massive roads will solve the city’s insatiable transport needs. Getting more of the city’s 16 million people onto buses and subways is crucial, they claim. A greater problem faces some of the buildings, roads and subways built during the frenzied construction boom of the past two decades: last summer a row of buildings in downtown Shanghai tilted over during a subway tunneling project. China’s builders still have some things to learn but it appears that nothing’s going to stop them building blocks for the world.