Tuesday, July 8, 2008

Chinese Conglomerate That Built These Landmarks... ...Snags $705m Contract For Sentosa Theme Park

Source : The Straits Times, July 8, 2008

Deal goes to arm of state-owned group that built China's steel industry

IN A sign of the growing role of China construction firms in Singapore, a top mainland firm has landed a plum $705 million job to build the highly-anticipated Universal Studios theme park on Sentosa.

Mainland building firms have shaken off perceptions of poor quality work, after rapidly picking up experience in the construction explosion that has accompanied China's spectacular economic boom.

HIGH-PROFILE JOB: China Jingye will be in charge of general building works and an amphitheatre for the Singapore version of the Universal Studios attraction. -- PHOTO: RESORTS WORLD AT SENTOSA

Resorts World at Sentosa (RWS) yesterday awarded the large contract to China Jingye Engineering, a unit of state- owned China Metallurgical Group Corp. The company founded and built China's huge steel industry.

The Chinese firm has worked on some of China's landmark projects such as the Beijing Olympic stadium and the new National Centre for the Performing Arts.

# Beijing's National Stadium

# Beijing's performing arts centre

The deal is China Jingye's biggest yet in Singapore and comes in the wake of high-profile investments made by China firms in Singapore's building industry recently.

In February, for example, Qingdao Construction Group clinched the contract to design and build an HDB site in Bishan with the highest bid of $135.9 million.

'Over the years, Chinese contractors have been increasingly able to successfully compete for higher-value contracts due to experience gleaned back home,' said Knight Frank director for research and consultancy Nicholas Mak. Also, there is no longer the perception of second-rate quality that beset Chinese firms when they first made forays abroad, he said.

One construction industry source, who declined to be named, told The Straits Times that China firms are becoming bigger players in the local industry - in tandem with the growing building sector in Singapore.

'These firms have access to cheaper labour and resources in China. We see them as healthy competition, which helps to ease some of the burden on the local contractors,' he said.

A check with the Building and Construction Authority showed that foreign firms make up 26.4 per cent of major construction players in Singapore. Of this, China firms make up 4.17 per cent, Japan 9.72 per cent and South Korea 2.78 per cent. China once trailed Korea and its share could rise soon, said Mr Mak.

China Jingye has clocked 12 years in Singapore, and has worked on HDB projects and other contracts. It recently won a $60 million deal to supply 23,000 tonnes of steel to the $6 billion Sentosa resort development.

An RWS spokesman said it held a tender exercise and 'chose the most suitable candidate based on suitability to deliver'. It declined to reveal details of the other bidders.

China Jingye managing director Tan Zhiyong said its ability to deliver projects on time and within budgets were key plus points. 'We have done overseas projects apart from China, such as Australia, and have a good track record,' he said.

China Jingye will be in charge of general building works such as structural buildings, facades, walkways and an amphitheatre at Universal Studios - which will feature 24 rides and attractions.

RWS said it is 'on track for a soft opening in early 2010'. It has awarded $2.7 billion worth of building contracts to date.

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