Meeting of the Working Group Africa
Paris. On its Meeting in Paris on 07 November, the EIC Working Group Africa met to discuss a new Africa Narrative.
Analysing the African Infrastructure Market
The Working Group established that the typical approach taken by Chinese infrastructure financiers in Africa is that of a full-project or lump-sum government-to-government agreement in which a “preferential” policy bank loan is supposed to cover 70-90% of the contract value. The contract bundle usually includes a promise for additional investment with interest rates varying considerably depending on the bargaining power or the project country.
Impacts on the international financial system
A study commissioned by EIC concluded that the unregulated official finance practices of China stand in opposition to the rule-based system developed by the international community and thus represent a threat to the global financial framework. China’s massive financial support for developing countries outside of the rule-based international system distorts international competition and creates significant advantages for its domestic export industry.
The Working Group decided to send a letter on the matter to BusinessEurope.
Workshop on the Internationalisation of Construction Companies
Assistance with financial risk assessment
In order to deal with these challenges, ministries of foreign affairs and economic development as well as the chambers of commerce and their financial agencies ought to be better staffed so they can assist in financial risks assessments. Mechanisms that need assessment are local regulations, political fluctuations and financial bureaucracy – e.g. obligations to set up local bank accounts and transfer “stat-up” equity at uncertain conditions. Furthermore, governmental agencies ought to take on the role of mediators in cases of non- or delayed payment.
Related to the role of the EU Commission, European policy makers ought to implement a harmonised and centralised supporting agency that is able to consult on regulations, deliver training on procurement modalities, share best practices and lessons-learned as well as support in mediation and the application of European funds.
Need for Roadmap
EU-China Connectivity Platform Meeting
Brussels. On 20 November, the 4th Expert Group meeting under EU-China Connectivity Platform took place in Brussels, Belgium.
The Connectivity Platform is an important policy forum established between the EU and China that aims to create synergies between EU policies and projects and China’s “Belt & Road” initiative. Specifically, the Platform promotes cooperation on infrastructure, including financing, interoperability and logistics.
Broad participation from Europe and China
The Expert Meeting was organised under the titled “Opportunities of financial Cooperation in EU and EU neighbourhood’s Infrastructure Projects” and brought together experts from both sides. The Chinese delegation consisted of representatives of the National Development and Reform Commission, China Development Bank, Bank of China, ICBC and CCCC, amongst others. The European Commission Services were represented by various Directorate-Generals, for instance DG MOVE, DG NEAR, DG ECFIN, DG GROW, DG TRADE, EEAS as well as the EIB and EBRD. EIC and FIEC were invited as observers.
Government representatives from the Western Balkan and from CIS countries took the opportunity to present infrastructure projects which could provide a link to the EU through the Ten-T Network and for which they are seeking financing.
Common understanding required for future collaboration
EU Representatives emphasised that key factors for a broader collaboration include open procurement and reciprocity as well as transparency and a level playing field. It cannot be in the interests of both sides if the Belt and Road initiative developed into a one-way street. Whilst it became clear during the discussion that Chinese contractors have become a dominant force in the Caucasus region on EBRD financed infrastructure projects, CDB admitted that non-Chinese contractors could only participate in their tenders when asked for by the loan recipients.
EY Construction, Engineering & Infrastructure Round Table
Paris. The 17th European Construction, Engineering & Infrastrcture Round Table is going to take place in Paris on 29 November.
EY Construction & Infrastructure invites to its round table on topics dealing with fast transforming industries. The goal of the event is to share ideas and discuss current trends and developments. Please find the detailed programme online. Registration can be completed on this website.
New ACM: Welcome HOMY
Lugano. EIC is delighted to welcome HOMY as new Associated Company Member.
The company based in Lugano, Switzerland and with a technical hub in northern Italy provides General Contractors, Oil&Gas and Mining Companies with new generation, safe and strong prefabricated building solutions for Site Camps, compliant with international standards. HOMY also provides solutions for affordable and low-income massive Housing Projects, and high-end residential, commercial and taylor made applications such as additional storeys, facades, partition walls.
Please find more information on the company website.
FIDIC: International Contract Users’ Conference
London. FIDIC’s International Contract Users’ Conference 2018 will take place on 04-05 December in London with Contractor & Claims Workshops taking place on 03 December and Modified Contracts & Dispute Resolution Workshops on 06 December.
FIDIC offers 20% off on participation at the conference for EIC newsletter readers. If you are interested in the discount, please follow this link: https://goo.gl/jdWks7.