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CN Briefing: Interserve; One Nine Elms; Chinese-UK JVs; changing market

When Interserve was named preferred bidder for Wanda One’s £900m One Nine Elms project last year, it raised a few eyebrows.

Interserve was (and still is) building its presence in the London commercial market, so this was a mammoth job to win.

Even more intriguing was the news that the winning bidder would be teaming up with a Chinese contractor to take on the project.

At the time, one director-level source told me he thought the move was “strange”, while others preferred to soften their description to simply “interesting”.

Fast forward 12 months and Interserve is no longer on the job, with Balfour Beatty and Brookfield Multiplex in the running to take over.

So what now for those great UK-Chinese tie-ups the chancellor so dearly wants and is so heavily pursuing?

Will Chinese construction firms break into the UK commercial market in the way we had originally expected? Or is the only way to tackle these high-pressure and high-profile UK schemes by using domestic contractors with track records of delivery?

“Perhaps the idea of a [UK-Asian] construction JV is not as straightforward as [Wanda One] thought?” one source mused this afternoon.

“Maybe they have bowed to pressure from the market in that the only way it’s going to get built is through a traditional UK construction vehicle.”

These are certainly valid questions, especially given the number of major Chinese-led commercial projects in the UK’s development pipeline.

So is there nothing to fear after all? Is the power battle between UK contractors and overseas competitors tipping in favour of the more established, domestic companies?

Or is this just a blip in a changing market that will inevitably move in the direction of more China-UK partnerships?

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