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One Belt One Road: Collaboration for the future

Catherine Li | 21 Jun 2017 | Comments

Recently, I had the opportunity to represent Atkins on the Hong Kong-Shanghai joint infrastructure investment delegation to visit Thailand and Vietnam, led by Hong Kong Trade and Development Council (HKTDC), to discuss cooperation and investment opportunities driven by growing intra-regional cooperation in Asia, especially under China’s One Belt and Road Initiative (OBOR).

OBOR is arguably one of the biggest stories in today’s Asia business sector, covering 60 countries and accounting for about 65 per cent of the world’s population, one-third of the world’s GDP, and about a quarter of all the goods and services the world moves. OBOR has the potential to be the world’s largest platform for regional collaboration. The infrastructure projects will stimulate economic growth and build legacy for countries along the way.

The visit was led by Hong Kong Trade Development Council (HKTDC). Atkins joined the mission as a key player in Hong Kong’s infrastructure sector and a strategic partner for HKTDC’s OBOR activities. I had the pleasure to join the other forty some leaders that are involved in the OBOR and infrastructure development with a diverse sector representation which made the trip particularly rewarding.

Thailand: A key OBOR development and public and private sector collaboration

Our first stop of the trip was Thailand. We had the opportunity to meet with various senior Thai government officials including the Thai Prime Minister General Prayut Chan-o-cha, as well as many leading Thai companies. On the business level, the highlight was the discussions on how Hong-Kong-based companies can help the development of the Eastern Economic Corridor (EEC). Thailand hopes to develop its eastern provinces into a leading ASEAN economic zone. Branded as one of the three key OBOR corridor developments (the other two being China-Myanmar corridor, and China-Pakistan Corridor), the EEC straddles three eastern provinces of Thailand – Chonburi, Rayong, and Chachoengsao – off the coast of the Gulf of Thailand and spans a total of 13,285 square kilometers. The government hopes to complete the EEC by 2021, turning these provinces into a hub for technological manufacturing and services with strong connectivity to its ASEAN neighbors by land, sea and air.

The government has identified four “core areas” essential in making the EEC a renowned economic zone: (1) increased and improved infrastructure; (2) business, industrial clusters, and innovation hubs; (3) tourism and; (4) the creation of new cities through smart urban planning. The government predicts the creation of 100,000 jobs a year in the manufacturing and service industry by 2020 through the EEC. 15 major investment projects for the EEC have been identified in line with the “core areas”.

The government expects US$43 billion (Thai Baht 1.5 trillion) for the realisation of the EEC over the next five years. This funding will come from a mix of state funds, public-private partnerships (PPPs), and foreign direct investment (FDI). As explained in a recent article “One Belt One Road: seven factors to attract private sector investment” by Chris Birdsong, Atkins’ CEO for Asia Pacific, the key for development projects of this scale to succeed is for the public and private sectors to work together closely to increase projects’ bankability, therefore attractiveness to private sectors to invest. The public sector has a major role to play, in facilitating and attracting private sector investors to realise the full potential of aspirational development like this.

It’s encouraging to see that with the Eastern Economic Corridor Bill, which was approved in principle in mid-April 2017, more than 100 Thai laws and regulations within the EEC which restrict foreign investment and generally curb the ease of doing business will be amended or suspended, in support of the government’s strategy to secure much of the funding for the EEC through PPPs and FDI. Offering and facilitating attractive incentives from the public sector to unleash the full potential from the private sector is key. I am excited that Atkins has started discussions/bidding to work on some of the key developments in the EEC.

Vietnam: Development vs Destination

The second stop of my trip was Vietnam. We met with Prime Minster Nguyen Xuan Phuc and many senior government officials including Nguyen Chi Dung, Minister of Planning and Investment and Nguyen Hong Truong, Deputy Minister of Transport, as well as major property developers. The property market there is rapidly emerging. In 2016, real estate in Vietnam saw a 12% increase in investment comparing with the year before. Driven by the young demographic, growing middle class and the boom of the tourism industry, especially high-end tourism, urban residential property and hotel development are in particular demand. Tourist destinations and major cities like Ho Chi Minh City (HCMC) present some interesting opportunities. In my view, it is of paramount importance not to view property developments in isolation, as a holistic and comprehensive planning approach would be the solid foundation for any development success.

Atkins has successfully delivered a number of high-profile architecture and masterplanning projects in the property market in Vietnam. Our multi-award-winning Landmark 81, at 460m tall when completed, is a testament to that. We believe that a comprehensive understanding of urban development to create a destination which offers future users or tenants an impeccable experience is something that no planner or architect should overlook. After all, what’s the use of a beautiful development that is impossible to get to? Or what is the use of a fast transport system when there is no destination to go to? And I am proud to say this is an important value that Atkins can add to our clients. We have started following up with some of the major players, and are working hard to create unique value propositions.

Capitalising on Hong Kong’s expertise and unique position

Comprehensive and effective project preparation is the first step towards success for any major infrastructure development. In an address from the Chief Executive from HKSAR, Hong Kong is ideally positioned to be the “super-connector” between the Mainland and the rest of the world. As China’s major international financial centre, and one of the world’s financial capitals, Hong Kong has the experience, the expertise and the connections to play a role as a major fundraising hub. Hong Kong hosts headquarters of many top international firms. The rich resource of top professionals in a wide range of services, such as accounting, law, construction, engineering and business management, also makes Hong Kong a go-to destination to seek professional advice for project preparation to close the funding gap. The HKTDC-led trip was a great example of the breadth and depth of expertise that Hong Kong has to offer to support major infrastructure developments in Asia, and Atkins is proud to be part of that!

No room for short sight  

Of course, a key aspect for the success of any development project, regardless infrastructure or property development, is to look into the future. Sustainable decisions must meet the need of today and the aspiration of tomorrow, taking into consideration rapidly changing technology. Although politics play a key role in facilitating major development projects, the decisions must be made beyond short-term political agendas and goals to solve an immediate problem; taking a holistic view of the country’s economic, demographic, cultural, social, environmental objectives and focusing on addressing the public’s needs of today and tomorrow is the key to ensure its longevity. In our industry, there is no room for short sight.

Catherine Li, Atkins’ director for strategy and business development for Asia Pacific, is a board director of the China Britain Business Council (CBBC), and Vice-Chair of the International Infrastructure Forum (IIF) at the British Chamber of Commerce in Hong Kong.