Trust born of tragedy builds closer ties
By Joseph Catanzaro and Li Fangchao (China Daily Africa) Updated: 2014-07-04 09:51
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The residential building immediately after the explosions two years ago. Provided to China Daily |
Construction of the stadium and dormitory buildings, which are being built for next year's All-Africa Games, is a joint venture between Weihai International Construction Engineering, Sinohydro, China State Construction Engineering Corporation and a Spanish company.
Li Junhai, general manager for Weihai's Congo operations, says the company is building six of the large apartment blocks that will house Africa's most promising athletes.
It is the latest in a series of infrastructure contracts the company has been awarded by the Congo government since 1998. Li says that, perhaps not coincidentally, business has picked up in the past two years. Weihai has $500 million worth of projects in the works, about 1,000 Chinese staff on the ground, and employs more than 1,000 locals during peak periods.
"We are making a profit here," Li says.
But despite the gains Chinese companies are making in the Congo, Li is convinced the writing is on the wall for infrastructure building in the country.
Chinese companies, victims of their own success, are increasingly competing against one another for contracts, he says, and he predicts that they will dry up once a certain level of development has been reached.
"In Africa, if you want to survive you have to transform beyond infrastructure. We've got at least five years. After that, things will really start to slow down.
"We are going to change our working model to build, operate and transfer. We will build it, we will operate it, and after a certain time we will transfer it to the Congo government."
Unlike infrastructure development, which requires a degree of risk for investors and often returns profits of less than 20 percent, Li says, service contracts have small overheads and high returns. Typically, Chinese companies are contracted to build projects and Western companies win the lucrative contracts to run the facilities once they are completed.
"We worked on Congo's new airport, which was funded by a Chinese government loan worth $180 million," Li says. "The airport we built is operated by the French. The 10 stadiums we built here are operated by Congo. The operation side is long term, and it's very profitable."
Professor Barry Sautman and Yan Hairong at the Hong Kong University of Science and Technology say despite the level of trust in Congo, it is still difficult to persuade any African government to hand over the reins to Chinese companies.
"Chinese companies are perceived as having less capacity than Western companies to carry out service contracts, for example in telecommunications, because of the language problem and relatively unfamiliar culture," Sautman says.
But if Li is deterred in any way, he is not showing it.
"Language is the biggest barrier. In the future we won't let that be the case."
Weihai plans to create specialist teams of trade-skilled, multilingual workers from China, and to attract more bilingual local and international talent, Li says.
Weihai area manager Ibata Serge Osee, 52, is one of the company's longest-serving and senior local employees. He is confident Chinese companies can win operational contracts, and says there is at least one successful precedent.
"In the south of the country there was a textile plant built and operated by a Chinese company that was eventually handed over to the Congo government. It's a workable model."
