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‘This MOU is different’: Atkins chief on the deal with China’s CHEC

16 April 2014 0 Comments

16 April 2014

Last week the British engineering and design giant Atkins signed a global cooperation deal with the similarly gigantic China Harbour Engineering Company, promising both access to major new markets. Here, Atkins’ Asia-Pacific chief Chris Birdsong tells David Rogers why this is not your usual MOU

Atkins’ global co-operation agreement with China Harbour Engineering Company (CHEC) – signed 11 April – brings together two formidable players on the global construction scene, but while such memoranda of understanding (MOUs) have been trumpeted before, too often they didn’t mean much.

“It was a huge trend,” Chris Birdsong, chief executive of Atkins Asia-Pacific arm, told GCR. “A lot of our competitors have done the same thing, and we’ve done it in the past. A lot of people went out there and signed these big MOUs or these cooperation agreements with Chinese entities and then they tried to figure out what they were going to do.”

This one is different, he says.

“What we did was start working with CHEC and we learned about each other and we built a relationship while we were doing real things and refining how we did them and forming a global relationship, as opposed to starting at the top with the MOU and saying ‘we’re going to conquer the world—now what do we do?’”

Samson Sin, Atkins’ managing director for Asia Pacific, with Fang Xiaobing, executive president of CCCC International, China Harbour’s parent company

The deal offers Atkins access to large transport infrastructure projects undertaken by CHEC around the world. CHEC does most of its work in east Asia, but is strong in Africa and has recently won a number of projects in Myanmar.

Birdsong said Atkins would not necessarily do all the design work. “Sometimes we would use design institutes or we might use local engineering, but we would play a pivotal role in the overall management of the design and the quality of the design,” he said.

The agreement promises the Chinese side help in winning work in areas where Atkins has a strong local presence.

CHEC has around 10,000 domestic and international employees and undertakes $10bn worth of projects, the company says.

Mo Wenhe, chairman of CHEC, said the partnership with Atkins was “vital for us to maintain our leading position as an international contractor and gain more competitiveness in the global market.” 

In other words, the deal reflects the accelerating international expansion of Chinese firms over the past two years.

Birdsong said: “We’re the biggest player in the UK so if they want to invest in that market or do a project there we can help that quite well.

Chris Birdsong, chief executive of Atkins’ Asia-Pacific arm

“There may be some places that they would want to go where we’d have no ability to help them because we have no local presence; we could help them figure out how to do it, but the real value will come where they want to invest and where they want to do projects someplace where we have a pretty good operation, like Asia, Europe and the Middle East.”

Pretty grown up

Despite the co-operation agreement, the firms will decide whether to work together on a project-by-project basis.

“We’re both pretty grown up about this,” Birdsong said. “There’ll be projects where CHEC will probably not need us, and projects where we may not need them.

“What’s great about this deal is that it is built on a firm understanding of how you create value for the end user as opposed to, ‘We signed an agreement with you so now we’re going to do everything together’. That world doesn’t exist.”

Birdsong added that the deal was helped by the UK government’s drive to forge closer economic links with China, and paid tribute to the efforts of UK Trade & Investment to deepen the relationship between the two countries.

“When you look at what the UK is trying to do, whether it be nuclear or seeking inward investment from China, what we’re doing is a microcosm of that,” he said.

CHEC is a subsidiary of China Communications Construction Company (CCCC).

CCCC, which acts as a kind of holding company, is presently sixth in Engineering News-Record’s rankings of global contractors, with a turnover of $47.3bn.

Among its notable schemes is the 41km Jiaozhou Bay Bridge, the longest in the world, according to Guinness World Records.