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Chifeng Bridge, in the port city of Tianjin, was one of Hyder's key mainland projects
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Hyder Consulting set up its first Asian office in Hong Kong 40 years ago. Since then, it has been involved in some of the city's major infrastructure projects, including sections of Hong Kong's mass transit railway and harbour crossings. The 150-year-old multinational advisory and design consultancy's ties to the region go back to 1883, when it helped build the Yang Shu Pu Water Treatment Plant in Shanghai. More than a century later, Hyder is poised to reap the benefits of new business opportunities on the mainland, thanks to the Central Government's Rmb4 trillion stimulus package.
"One-fourth of our East Asia business now is on the Chinese mainland," said Hyder's East Asia Managing Director Stephen Porter, who expects that the mainland will eventually represent half of the company's total business in the region. "The opportunities for us in the short term are on the mainland, in part, because of the government's stimulus package," he said.
A recent Hong Kong Trade Development Council (HKTDC) study concluded that Hong Kong's expertise in such areas as infrastructure construction, real estate development, environmental protection, exhibitions and logistics will be in great demand as the mainland undergoes a major facelift.
Infrastructure Rising
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China already constitutes a quarter of Hyder Consulting's business in the region, says the company's East Asia Managing Director
Stephen Porter
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Of the Rmb100 billion in investment projects released in the first tranche last December, Rmb81 million is tied to infrastructure and related projects.
"Under the Closer Economic Partnership Arrangement (CEPA), Hong Kong services are allowed to set up wholly owned enterprises on the mainland to provide a variety of construction and related services," said HKTDC Assistant Chief Economist Dickson Ho, author of the report.
The study suggests that Hong Kong companies with strong funding and technical expertise will want to explore opportunities to become main project contractors or sub-contractors, using the Build-Operate-Transfer or Public-Private Partnership models.
London-listed Hyder has worked in more than 30 Chinese cities over the past five years, including Beijing and Shanghai. Its focus now is on the mainland's second-tier cities, where "we're looking to build infrastructure that will become landmarks." One of its recently completed projects is the Chifeng Bridge in Tianjin. The bridge's unique design, which resembles a ship, reflects the port city's heritage. "In coming up with a design, we try to reflect what's special about the place," Mr Porter said.
The company is now working on a major government project in Haikou, the capital of Hainan Province, planning a centre for new government districts, as well as transport planning and landscape design for the Tangshan new town in Nanjing. According to Mr Porter, the demand for designers needed for the infrastructure planned on the mainland in the next few years may outstrip supply. "It's better to be in the infrastructure business these days than in banking," Mr Porter observed.
Environmental Focus
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Hyder has been focusing on such second-tier cities as Tianjin
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Hong Kong-based service providers in the environmental protection industry also stand to benefit from the mainland's stimulus package.
"CEPA allows Hong Kong services providers in the environmental protection industry to operate as wholly owned enterprises on the mainland to provide a range of environmental protection and related services," Mr Ho added. "On the mainland, Hong Kong companies' excellent project management, effective communication and use of advanced environmental technology for customised applications are well recognised."
There are also opportunities for services providers in sewage and solid-waste treatment, water conservation, energy efficiency and pollutant abatement projects.
The stimulus package is heavily tilted towards rural development and projects in the less-developed central and western regions. Many projects may well be low-cost, with less demand for technical capability, an area where Hong Kong service providers excel.
Going, Going . . .
The HKTDC study noted that Hong Kong service suppliers must act quickly if they want a slice of the stimulus package, which is intended to be spent by the end of next year. To date, the mainland government has spent more than a third of the stimulus package, according to the National Development and Reform Commission.
The report pointed out that to expedite their chances, Hong Kong firms should consider teaming up with mainland companies in targeting infrastructure projects, contributing their technical and project management expertise to the partnership.
For its part, Hyder plans to continue focusing on building its business on the mainland by working with its Hong Kong and mainland partners.
"Our Hong Kong business is key to our business in the region," Mr Porter said. "It's a great entry point. We've been here a long time and have developed international expertise. To do business on the mainland, you need local ties, which we have in Hong Kong."
For more information, please refer to the HKTDC's Trade Watch report, "The Chinese Mainland's Rmb4-Trillion Stimulus Package and Opportunities for the Hong Kong Services Sector," which can be ordered at www.hktdc.com/bookshop.
Related Link
Hyder Consulting
