The £800m Airport City Manchester scheme is “definitely not the last” UK project the Beijing Construction Engineering Group will work on, according to its managing director.
Asked by Construction News whether it would be interested in more UK projects after this scheme, Xing Yan said: “Yes, although this is our main focus, the first one we want to do and we want to do it well.
“This is the start of our relationship with Manchester and the UK but definitely not the last – we’re hoping to do more.”
He was speaking after the confirmation of the joint venture behind the £800m Airport City Manchester scheme, which will include hotels, retail and office development space.
BCEG is believed to be the first major Chinese contractor to carry out work as a tier one firm on a UK scheme.
The Chinese contractor is a 20 per cent equity partner in the scheme, alongside Carillion (20 per cent) and the Greater Manchester Pension Fund (10 per cent), with Argent appointed as the development manager. Manchester Airports Group has the remaining 50 per cent share.
Mr Yan said the attraction of working on a scheme in the UK had been recognised within the company for “a long time”.
He added: “We are not the only international Chinese contractor but we are probably the first one to actually put our hands on a particular project.
“For a very long time, Chinese contractors would consider the UK as a high-end, complicated market and that may be one reason that stopped Chinese contractors coming here to do business.
“Our own experience has told us as long as you learn the local rules and regulations and respect them, to do business here is not difficult.”
Manchester Airports Group
MAG chief executive Charlie Cornish said BCEG had been brought on board for its construction expertise, rather than simply due to its equity investment.
“A lot of people just assume they are there because of the investment they are bringing, that’s not the case because we could have funded this on our own.
“We were looking for it to be a city in its own right. We wanted a mix of skills in the JV and working with the JV. We wanted a company who was global and BCEG are keen to expand internationally.
“That is of interest, that globailsation bring networks and creates opportunities. Then you look at design, engineering, construction in China they do things differently from western companies. They’re starting to design and build a new Beijing airport for 150m passengers and they want to do it in three years.
“The innovation they have to bring in, and the thinking to do that in three years is quite impressive.”
Mr Cornish said aspects like health and safety and sustainaility were all factored in when considering partners, but that construction standards for the scheme would be set by the joint venture partners.
“Given the scale of BCEG, this scheme is important to them in terms of international profile and reputation so the last thing they’ll want to do is cut corners on this scheme.”
Mr Cornish said the group was conscious of creating greater inward investment into the region, and direct flights to China were part of the growth plan over the next two years.
“We see China as key. There are undoubtedly a number of Chinese international companies looking to see what they can do and we know a number looking to locate in Europe.
“We will go to China as an airport city JV with Argent and will talk through the region, skills, education and how people can get access to the region. We’ll talk them through connectivity to the market and from Manchester Airport you can get anywhere in the world.”
“Future connectivity is a long-term play. We’re active promoters of HS2. We see it as key for the long-term development of the UK. We should be starting in the south and north at the same time. There’s a big disparity between London and the rest of the UK but high speed rail will start to rebelance that economy.”
BCEG is sending a senior delegation to MIPIM, the international property conference in Cannes, France, starting today.
As part of the joint venture for Airport City Manchester, BCEG has established a 25-person office at Manchester Airport.
Outline planning permission for Airport City Manchester was secured at the start of 2013. It will provide 5m sq ft of development space, comprising a mix of offices, hotels, advanced manufacturing, logistics and warehousing.
DHL was announced as the first occupier at Airport City Manchester in November 2013, taking a 37,308 sq ft bespoke logistics building.
Mr Yan said: “We are a construction company, it’s our main business. We invest in some of our international markets when we see good opportunities, like the US and Mauritius.
“After careful study, we decided the UK was a good place to invest because of the mature system and we believe in the future of investment in the UK.
“We do construction not only in China, but in 26 countries covering five continents. Constuction is what we do, and for this we will work with our partners and BCEG is going to do part of the project – probably half of the projects and local partners will do the other half.”
Carillion will carry out 50 per cent of the construction work, with BCEG to carry out the other half. Local subcontractors are expected to be used.
Asked how easy he expected carrying out construction work in the UK to be, Mr Yan said: “You can’t just come here expecting to things in your own way, or a way that is practical in your own country.
“You have to do your homework, study local rules and regulations and it’s important to work with your partners. We have some very helpful partners like MAG and the Manchester China forum.
“As long as you study carefully, you have to respect regulations and there won’t be any difficulties.”