Chinese Overseas EPC Project Management             Kaibo Engineering Group Corp.                       Beijing           ...
Personal Introduction                  MBA, Duke University, USA.                  Bachelor in Engineering , AUT Universit...
Kaibo Engineering Group   Ⅰ. Core Business     International project management(EPCM、PMC)   Ⅱ. Core Team     Kaibo Group‟s...
Contents I.   Chinese enterprises overseas project market      development II. Chinese main project cases III. Current Chi...
Ⅰ. Chinese enterprises overseas project market   development      (Ⅰ) History of Chinese enterprises overseas project     ...
(Ⅰ) History of Chinese enterprises overseas projectdevelopment    1. 1950s    During this period, Chinese overseas project...
(Ⅰ) History of Chinese enterprises overseas projectdevelopment    4. Rapid development stage (1990-1999)    Between 1990 a...
Ⅰ. Chinese enterprises overseas project market   development    (Ⅱ) Primary Markets and Project Cases  (二)现有管理水平评(二)现有管理水平...
(Ⅱ) Primary Markets and Project Cases    1. Primary Markets:               Tender amounts distribution of                 ...
(Ⅱ) Primary Markets and Project Cases  Primary investing target countries:      In 2009, the primary overseas markets of C...
(Ⅱ) Primary Markets and Project Cases 2. Types of investment      Distribution of project investment types in 2009        ...
Ⅰ. Chinese enterprises overseas project market   development  (Ⅲ) Project contracting market in Africa  (二)现有管理水平评(二)现有管理水...
(Ⅲ) Project contracting market in Africa   1. Market development in Africa     The current situation in Africa has had gra...
(Ⅲ) Project contracting market in Africa   1. Market development in Africa     The rapid and stable development of the eco...
(Ⅲ) Project contracting market in Africa   2. China-Africa relations      China-Africa relations have lasted for half a ce...
(Ⅲ) Project contracting market in Africa   3. Chinese enterprises in Africa                        • From 1970s to 1980`s ...
(Ⅲ) Project contracting market in Africa   4. Future cooperation between China and Africa      (1) China-Africa economy an...
(Ⅲ) Project contracting market in Africa     South Africa announced it will invest $78 billion in infrastructure      dev...
(Ⅲ) Project contracting market in Africa   4. Future cooperation between China and Africa      (3) The advantages of Chine...
Contents I.   Chinese enterprises overseas project market      development II. Chinas main project cases III. Current Chin...
Ⅱ. Chinas main project cases   (Ⅰ) The world-class projects cases in China     1. The worlds largest hydropower project - ...
Ⅱ. Chinas main project cases  (Ⅰ) The world-class projects cases within China                        22
(Ⅰ) The world-class projects cases in China  1. The worlds largest hydropower project - the Three Gorges Dam  •   General ...
(一)中国国内世界级的工程项目案例            24
(Ⅰ) The world-class projects cases in China  2. Shanghai Jinmao Tower  •   General Contractor: Shanghai Construction Engin...
(Ⅰ) The world-class projects cases in China  3. Qinghai-Tibet Railway  •   General Contractor: China Railway Group Limited...
Ⅱ. Chinas main project cases  (Ⅱ) Chinese Contractors Remarkable Projects in                 International Market         ...
(Ⅱ) Chinese Contractors Remarkable Projects inInternational Market  1. Venezuelas Northern Plains Rail System (Tinaco to A...
(Ⅱ) Chinese Contractors Remarkable Projects inInternational Market  2. COCA CODO-SINCLAIR Hydropower Project in Ecuador   ...
(Ⅱ) Chinese Contractors Remarkable Projects inInternational Market  3. Universal Studios Singapore   •   General Contracto...
Ⅱ. Chinas main project cases  (Ⅲ) Chinese Contractors Remarkable Projects in Africa     1. Highway project :Algeria East-W...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica        1.Chinese Highway Projects in Africa                         32
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica  (1) Algeria East-West Highway Project   •   General Contractor: Join...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica  (2) Highway project from Addis Ababa to Adama in Ethiopia   •   Gene...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica    2.Chinese Railway Projects in Africa                        35
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica       Railway Modernization Project in Nigeria   •    General Contrac...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica3.Chinese Water Conservation and Hydropower                 Projects i...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica  (1) Sudan Merowe Dam   •   General Contractor: A consortium of Chine...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica   (2) Tekeze Hydropower Station in Ethiopia   •   General Contractor:...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica    4.Chinese Housing projects in Africa                        40
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica  (1) Algeria International Conference Center   •   General Contractor...
(Ⅲ) Chinese Contractors Remarkable Projects inAfrica  (2) Social housing project in Angola      General Contractor: CITIC...
Contents I.   Chinese enterprises overseas project market      development II. Chinas main project cases III. Current Chin...
Ⅲ. Current Chinese Overseas Engineering Project   Management Situation      (Ⅰ) Evaluation of Existing Management      (Ⅱ)...
(Ⅰ) Evaluation of Existing Management  After 20 years of overseas expansion, China has made remarkable  achievements in en...
Ⅲ. Current Chinese Overseas Engineering Project   Management Situation        (Ⅱ) Main Advantages of Chinese              ...
(Ⅱ) Main Advantages of Chinese Contracting Companies    1. Cost-price advantage     (1) Materials        Full range of cos...
(Ⅱ) Main Advantages of Chinese Contracting Companies                  琐琐碎碎                                                ...
(Ⅱ) Main Advantages of Chinese Contracting Companies   3. Financial Advantage   (1) Strong Self-funding Capability     Mos...
(Ⅱ) Main Advantages of Chinese Contracting Companies    (2) Strong Financing Capability:        China has abundant capital...
(Ⅱ) Main Advantages of Chinese Contracting Companies    4. Policy advantage     (1) “Going out" Strategy        From "goin...
(Ⅱ) Main Advantages of Chinese Contracting Companies    4. Policy advantage     (3) National Industrial Position:         ...
(Ⅱ) Main Advantages of Chinese Contracting Companies    5. Emotional and cultural advantages     (1) Hold strong political...
Ⅲ. Current Chinese Overseas Engineering Project   Management Situation        (Ⅲ) Main Challenges of Chinese              ...
(Ⅲ)Main Challenges of Chinese Contracting Companies    1. Non-rational tender     (1) Lower cost and lower bidding price l...
(Ⅲ)Main Challenges of Chinese Contracting Companies    2. Prices increase    (1) Raw material prices increase such as ceme...
(Ⅲ)Main Challenges of Chinese Contracting Companies    3. Communication problems    (1) Linguistic capacity       Case:Pro...
(Ⅲ)Main Challenges of Chinese Contracting Companies    4. Regular Standards     (1) China‟s standards lack foreign languag...
(Ⅲ)Main Challenges of Chinese Contracting Companies    5. Different management systems     (1) Organization and project ma...
(Ⅲ)Main Challenges of Chinese Contracting Companies    6. HSE awareness, social responsibility, and brand        awareness...
(Ⅲ)Main Challenges of Chinese Contracting Companies    7. The main problems in management            26     26   25       ...
Contents I.   Chinese enterprises overseas project market      development II. Chinas main project cases III. Current Chin...
Ⅳ. Current International Project Management Features           (Ⅰ)   Integration           (Ⅱ)   Standardization          ...
Ⅳ. Current International Project Management Features     (Ⅰ) Integration       1. In the past 5 years, Chinas internationa...
Ⅳ. Current International Project Management Features      (Ⅱ) Standardization       1. Procedures       2. Forms       3. ...
Ⅳ. Current International Project Management Features     (Ⅲ) Specialization      1. Professional Software         e.g. Pri...
Ⅳ. Current International Project Management FeaturesCase:           琐琐碎碎                                                  ...
Ⅳ. Current International Project Management Features     (Ⅳ) Informatization      1. Full use of network         e.g. MSN,...
Ⅳ. Current International Project Management Features     (Ⅴ) Internationalization       1. Labor : International Labor    ...
Contents I.   Chinese enterprises overseas project market      development II. Chinas main project cases III. Current Chin...
Ⅴ. How To Manage Chinese Engineering Contractors    (Ⅰ) Pursuit of sustainable development    (Ⅱ) Give up low price tender...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅰ)     Pursuit of sustainable development   1. Planning of infrastructu...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅱ)      Give up low price tender strategy    1. Difficult to ensure pro...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅲ)     Standardized project management method    1. Adopt cross-border ...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅳ) Adopt flexible and realistic standard and management  methods    1. ...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅳ) Adopt flexible and realistic standards and management  methods   2. ...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅴ) Strengthen management of project implementation phase   1. Determine...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅵ)      Choose high-quality consulting company, cultivate  localized ma...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅵ)    Choose high-quality consulting company, cultivate  localized mana...
Ⅴ. How To Manage Chinese Engineering Contractors                                        Quality: good personal qualities, ...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅶ)      Guide localization of Chinese engineering contractors    1. Hel...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅷ)      Improve professionalism of Chinese contractors    1. Increase t...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅸ)     Provide the necessary support and assistance to the  Chinese eng...
Ⅴ. How To Manage Chinese Engineering Contractors  (Ⅹ)      Maintain a stable political environment and prepare  adequate f...
Questions & Discussion     Questions & Discussion                         85
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China in Africa

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Kaibo Engineering shows the challenges faced of Chinese firms in Africa and how to overcome these challenges.

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  • Kaibo Group’s core business is international project management (EPCM, PMC), in which we provide project management and consulting services to owners and Chinese construction enterprises in large-scale construction projects. Our services cover all stages and operations through the course of a project, from financing and tendering to project management and project completion. Our company focuses on large-scale overseas construction project management facets, including integration, standardization, professionalism, processes, and other features. We explore a series of management systems and management methods in order to fully utilize overseas and domestic resources to successfully adapt Chinese enterprises to international construction standards.The Kaibo Group team is made up of project management scholars and researchers from Yale, Duke, Stanford, and other prestigious academic institutions, as well as engineering project management specialists who have studied and trained abroad for long-term periods. Kaibo Group is committed to providing full service in project management through the integration of overseas and domestic project management resources and emphasizing international project management standards in facing both the international and domestic high-end markets. Kaibo Group has accumulated extensive international project management experience in China, the US, Australia, and Africa, among other nations. Kaibo Group specializes in resolving difficult issues from various project management aspects, including project control, risk control, design management, material procurement, communication, document control, and labor control. Our project management expertise covers a range of advanced concepts including management structure, operational procedures, and strategy development and implementation. Through our experience and relationships we have developed a strong and reputable position in our industry.  In 2010, Kaibo Group undertook engineering project management and consulting work on projects in Australia and Africa, at a total value of over $40 billion USD. Kaibo Group has developed a remarkable reputation in the international project management field.
  • 低价竞标,没有能力维护信誉和品牌。一些海外工程建设企业在低价竞标后,一味追求低成本,降低工程质量标准,以失去信誉和品牌的代价换取短暂的高额利润。
  • 第一,语言能力问题。首先,在海外工程建设项目管理中语言关是一道坎,特别是项目经理更要克服语言障碍,才能与客户进行有效沟通。如果项目经理不会说英文,只能借助于翻译,这种情形下,就容易出现两种情况,一是翻译水平有限,导致双方在沟通方面出现分歧;二是翻译越俎代庖,导致对方直接找翻译,而不找项目经理。其次,在沟通过程中需要项目经理有敏锐的洞察力。时间点的把握对有些问题的解决非常重要,特别是那些需要直接对话、当场解决的问题。与对方的直接沟通、交流更便于发现对方的弱点和问题,从而找到解决问题的突破点。第二,沟通规则、沟通技巧。项目管理人员要熟悉沟通规则和沟通技巧。我企业管理人员往往不注重这一点,致使有时不能充分满足客户的合理需求,有时不能坚持自己的底线和捍卫自己的权益,有时不善于掌握有理、有利、有节的原则。例如,在某地中海项目中,由于我方人员不熟悉沟通的规则和技巧,与监理关系处理不得当,导致后期工作非常被动。对方提出的问题我方不能有效解决,甚至连对方提供的会议纪要我方都只有照单全签。后来我方委派经验丰富的管理人员介入该项目,一方面按照监理要求完善我方文控体系,另一方面也对监理方工作上出现的问题提出质疑,要求对方提供相应组织结构图、改变人员经常变动的现状,并要求对方提前将会议纪要按程序提前发送等。通过与对方直接对话,我们“被动挨打”的局面逐步改善。所以我们在与外方打交道的过程中,既不能一味的投降,也不能一味的蛮横,对于对方提出的合理要求,要痛快的答应,一旦承诺就一定要实现。第三,文化、礼仪。在对外交流与交往中,着装、礼仪乃至邮件这些细节,都会影响沟通的效果,比如一定要注重着装要求。在着装方面,少数人员易走“过于正式或过于松散”两个极端,以至于在项目工作会议上,经常出现要么是西装革履的正装与对方或周围人员不和谐,要么是“拖鞋加裤衩”的度假装扮。另外,有些公司的员工乃至高层人员经常使用个人邮箱;有时候邮件标题不明确,甚至出现排版混乱的状况。这些都容易给对方留下不专业的印象。
  • 中国在钢结构、抗震设计、消防设施等方面的规范标准高于欧美标准。1.钢结构焊接标准,中国标准要求合格率要超过95%,高于美国阿斯米标准2.在抗震措施上,中国标准较欧美标准更加详尽严格3.消防标准:在建筑构件耐火等级和建筑物间的防火间距上,我国标准的要求总体上要高于欧美及日本等国的标准规范China standards on steel Structure, seismic design, fire facilities, and other aspects are higher than the European and American 1. Steel welding standards, standards in China require the pass rate is more than 95%, higher than the U.S. A Simi standard2. In aseismatic measures, Chinese standards are more detailed and stricter than the European standards 3. Fire safety standards: on the fire resistance rating of building and the fire separation spacing between buildings, our standards generally higher than Europe, America and Japan standards 
  • 少数中资企业在进行海外建设时,缺乏社会责任感的现象常有发生。比较典型的就是“乱吃野生动物”,更有甚者,我国海外建设企业所到之处野生动物全被抢吃一空。缺少正面宣传和形象塑造。一些海外建设企业不注重这一点,包括没有建立起良好的办公环境和软文化宣传。例如,某中资企业承包海外某40亿元的工程项目,该中资企业的办公环境却异常简陋,甚至都没有一个开会的场所,不但与外国客户进行沟通极为不便利,而且也与该企业雄厚的工程建设实力不相匹配。
  • 近五年来,我国国际工程承包业务量相当于之前20年业务量的总和,并且整体规模还在以每年30%的速度增长,同时档次也在不断提高。在参与国际工程项目投标的企业和联营体方面,仅今天上半年(截至2010年6月30日),就达到141家,平均投标次数6.1次,高于去年同期5.7次的水平。在项目总值方面,2006年,我国1亿美金以上的项目有96个,2008年增加到195个,到2009年,我国国际工程承包金额达5000万美金以上的项目已占全部投标数量的51%,占总合同金额的94%。根据中国对外承包工程商会的最新数据,我企业2010年上半年(截至2010年6月30日)累计投标项目703个,预计项目合同额1570亿美元,较2009年同期分别增长了27%和62%,平均项目合同额也高达2.23亿美元,比2009年同期增长了27%。我国对外承包工程近五年具体营业额见表1。 随着我国国际工程承包业务量的增加,EPC和D&B项目所占的比重也在不断增长,合同金额增幅也较大。截至2010年6月30日,我企业投标的EPC和D&B项目的平均合同金额已达到4.83亿美元,比去年同期增长49%。由此可见,我企业积极顺应大型项目交钥匙建设方式的趋势,整合设计力量的能力不断增强,参与设计采购施工等高端项目的层次进一步提升。
  • 相对于国内企业而言,一些发达国家已经建立了比较完善的管理体系,具体体现在以下几个方面:第一,统一的程序文件。在一些较发达的国家或西方背景的大公司,特别是在规模较大的项目上,大都建立了完善的程序体系。比如在国外,通常一个正规的大型项目上会有几十个主程序,而子程序可能更多,有时可达三五百个。这些程序对项目管理的规范进行起到了基础性的保障作用。第二,统一的体系文件表格。在现代企业管理体系中,公司或个人的做事方法很多时候都会体现在表格中,以体现出企业流程化的管理特点。简练的表格体系会大大节约管理者的时间,提升管理效率和质量。第三,统一的制度体系和文件模板体系。一些公司在项目管理实践中积累了很多优秀的管理制度和文件,这些制度和文件可以成为其他人参考的模板。公司将其存放在公司数据库中,随用随调,可以为项目管理者节省大量的时间。第四,统一的信息传递体系。现代项目管理中涉及到非常多的信息交流,如果仅靠传统的纸质文件管理办法,文件管理人员的工作量将非常大。现在通过建立系统化的信息管理体系和方法,可以大大加快文件的传递效率,扩大文件的传递范围,提高文件的传递和保存质量。第五,统一的培训体系。培训体系是以上所有体系建立和完善的基础之一。特别是当一个员工新进入一个公司或一个项目时,好的培训体系,会让他们在短时期内了解和适应管理需要,发挥自如,并最终成为该体系的一部分,乃至成为该体系理念与方法的传递者。
  • 1.专业化管理软件的应用,帮助很多现代化公司提高了工作效率。比如在控制、合同领域中P6软件的应用,另外在采购管理、文控管理等方面,每个公司都会应用相应的软件,并且会根据自己公司的管理特征对一些软件进行开发,然后对进入公司的相关人员进行相应软件方面的培训。2-3.在海外承包工程这一大产业下,已经细化出无数的小产业,从咨询、设计、施工、采购到更细的设备租赁、物流、清关、劳务等多个领域。优秀的公司能将这些专业的分包和服务队伍充分整合起来,为业主提供最优质的服务。我企业在海外工程项目建设市场所占份额越来越大,向高端市场迈进的步伐越来越快,同时项目的复杂度也在不断增加,各环节间的衔接也更加紧密。例如:某工程额度较大的石化项目,实施过程中需要3600吨的环轨吊车作业,而这种吊车在全球只有4台,并且需要提前半年预订,如果订不上就会影响整个工期和整个项目控制,所以此设备必定在关键线路上。4.随着专业分工的细化和科学化,现代项目管理中应用的项目管理技术越来越多。比如OBS(Organization Breakdown Structure)、WBS(Work Breakdown Structure)及“赢得值”理论,这些管理工具的应用能帮助我们提高管理效率。5.在很多项目中,由于我们总包分包的组织结构与国外业主监理的组织结构不对应,造成了双方不能有效沟通,凡事都找项目经理的局面,没有形成“兵对兵、将对将”的对话机制。比如某澳大利亚矿山项目,该项目组织结构非常庞大和复杂,涉及业主、总包、分包及管理公司,共计571个职位(即图1中的571个框),每一个职位都配以有效的职责,具体图示见图1。建立这样的组织结构,目前对国内企业来说还具有一定的难度。
  • 1.充分利用网络,利用MSN、Skype、Email等各种网络平台。海外工程承包公司应充分利用网络,例如:MSN、Skype、Email等各种网络平台实现自身的快速反应,实现语言、图像的同步传输,提高交流效果。2.一般来说,在西方管理环境下,监理会迅速反应和处理各项事宜,同时也会对承包商提出相同的要求和期待。我企业常常因为信息传递问题而陷入被动局面。比如,在某个海外项目中,由于我们中资公司连续表现不佳,因此对方发出了结束合同的最后通牒。但是,该通知发出半个月之久后,我企业仍未作任何反应。后来通过与对方对话,才知道他们已发过多次警告,但我们始终没有回应。经查证,原来该中资公司与对方沟通的邮箱是个人邮箱,而邮箱所有人已离开项目团队。打开该邮箱,里面的文件已堆积如山,大部分是对方发出的警告、通知等等。3.通过对信息的有序分配,我们可以做到一般了解与精专掌握相结合,使“对的人掌握对的信息”,从而避免因为信息分发不当而给对方带来不必要的麻烦。随着信息的增多,很多问题也会随之出现,当每个人接触到特别多信息的时候,如果不能对这些信息进行有效的优先级排序,将难以处理好这些信息,所以一定要明确哪些信息是可读可不读的,哪些是可分发或不可分发的,否则会给一些不相关人员带来信息干扰。
  • 跨国化主要体现在四个方面,即:劳务的国际化、采购的国际化、管理的国际化以及金融、汇率、税务等经济环境的国际化。正因为以上特点的存在,再加上劳动力价格的上涨、社会分工的专业化以及流程化的要求等,项目管理在工程建设中占有越来越重要的位置。由于国内劳动力充足、价格低,可以搞人海战术,再加上国内的物资资料丰富,以上问题也许对国内的工程管理影响不是很大。但是,当我们在进行海外工程项目建设时,情况就有所不同,尤其是国外物料采购价格高、采购周期长的特点,使得海外工程建设对计划、控制的要求非常高,需要更科学的方法、更周密的策划来进行项目管理。
  • China in Africa

    1. 1. Chinese Overseas EPC Project Management Kaibo Engineering Group Corp. Beijing Oct 2010 KAIBO ENGINEERING GROUP CORP.
    2. 2. Personal Introduction MBA, Duke University, USA. Bachelor in Engineering , AUT University ,New Zealand Mr. Tom Zhu has extensive engineering project consulting experience internationally, including in China and New Zealand. Tom has been involved in several startup projects in both countries. In addition to civil engineering projects, Tom also possess significant experience in the Mr. Tom Zhu real estate sector. Contact: Tel: +86-10-59073235 Email: tzhu@kaibogroup.com 2
    3. 3. Kaibo Engineering Group Ⅰ. Core Business International project management(EPCM、PMC) Ⅱ. Core Team Kaibo Group‟s team is made up of project management scholars and researchers from prestigious academic institutions like Yale, Duke, Stanford, and experienced engineering project management specialists. Ⅲ. Main Accomplishments Kaibo Group has accumulated extensive international project management experience in China, US, Australia, and Africa, among other nations. Kaibo Group has developed a remarkable reputation in international project management field. In 2010, it undertook engineering project management and consulting work on projects in Australia and Africa, at a total value of over 4 billion USD. 3
    4. 4. Contents I. Chinese enterprises overseas project market development II. Chinese main project cases III. Current Chinese Overseas Engineering Project Management Situation IV. Current International Project Management Features V. How To Manage Chinese Engineering Contractors 4
    5. 5. Ⅰ. Chinese enterprises overseas project market development (Ⅰ) History of Chinese enterprises overseas project development (Ⅱ) Primary Markets and Project Cases (Ⅲ) Project contracting market in Africa 5
    6. 6. (Ⅰ) History of Chinese enterprises overseas projectdevelopment 1. 1950s During this period, Chinese overseas projects were focused primarily on rebuilding Asian and African countries 2. Initial stage (1978-1982) : In 1978, Chinese enterprises began to enter the international engineering contracting market. Before 1983, Chinese enterprises that were engaged in foreign project contracts and labor service cooperation contracts totaled less than 30. The total value of signed contracts was $1.25 billion, and the completed turnover was $560 million. 3. Stable growth stage (1983-1989) From 1983 to 1989, China accumulated a total of $11.56 billion in foreign engineering contracts and labor service cooperation contracts, and the completed turnover was $7.2 billion. The market has expanded to more than 130 countries and regions. 6
    7. 7. (Ⅰ) History of Chinese enterprises overseas projectdevelopment 4. Rapid development stage (1990-1999) Between 1990 and 1998, Chinese enterprises signed foreign contracted projects and labor cooperation contracts that totaled $70.66 billion at an annual increase of 24.1% and completed turnover of $50.59 billion at an annual increase of 27.3%. 5. International market takes important position (2000-present) There are currently over 2,000 eligible Chinese companies for foreign contracted projects, and the business scale is rapidly expanding. In 2010, there was a total of 54 Chinese enterprises in the ENR top 225 international contractors who won 13.2% of international market share, the most in the world. Overseas turnover was $50.57 billion. 7
    8. 8. Ⅰ. Chinese enterprises overseas project market development (Ⅱ) Primary Markets and Project Cases (二)现有管理水平评(二)现有管理水平评价价(二)现有管 理水平评价 8
    9. 9. (Ⅱ) Primary Markets and Project Cases 1. Primary Markets: Tender amounts distribution of Chinese enterprises overseas project Chinese enterprises overseas markets in 2009 project markets include Africa Asia Africa, Asia, Middle Latin America The Middle East East, Europe, Latin Europ North America America, North America, etc. Oceania 5% 2% 13% 39% 17% 24% 9
    10. 10. (Ⅱ) Primary Markets and Project Cases Primary investing target countries: In 2009, the primary overseas markets of China International Contractors include: Iran, Venezuela, India, Saudi Arabia, Libya, Vietnam, Sudan, Algeria, Nigeria, Angola, etc.. Among them, the tender amount in the African market accounted for about 39% of the total amount. Tender amounts of top-ranking countries are as follows: New contract amounts rank in Afica markets of China.(100 million U.S. dollars) 58.4 44.34 39.96 39.45 Libya Sudan Algeria Nigeria 10
    11. 11. (Ⅱ) Primary Markets and Project Cases 2. Types of investment Distribution of project investment types in 2009 projects: Tender Amount(%) Value(%) 49 Chinese enterprises overseas projects 34 primarily include: 25 transportation, housing 13 13 11 9 7 7 10 6 5 4 3 construction, petroche 2 2 mical, water utilities, and other industrial facilities. 11
    12. 12. Ⅰ. Chinese enterprises overseas project market development (Ⅲ) Project contracting market in Africa (二)现有管理水平评(二)现有管理水平评价价(二)现有管 理水平评价 12
    13. 13. (Ⅲ) Project contracting market in Africa 1. Market development in Africa The current situation in Africa has had gratifying changes. There is less tension in African countries, and the political environment has become more and more stable. African economies have achieved the desired growth targets to accelerate regional economic integration, and the pursuit for stable development have become the major trend in Africa. As the global economy has begun to recover, the demand for African minerals and raw materials is increasing. Particularly the rapid growth of the national economy of China, India and Brazil as well as other emerging economies, will contribute to the acceleration of economic development in Africa. African economic growth is expected to reach 5% in 2010, at which it will surpass Europe (1.5%) and the United States (2.5%). According to IMF (International Monetary Fund) statistics, from 2000 to 2010, the African economic growth rate was higher than that of Brazil and India; from 2010 to 2015, the African economy is expected to reach an average annual growth rate of more than 6%, surpassing the growth rate of Brazil. 13
    14. 14. (Ⅲ) Project contracting market in Africa 1. Market development in Africa The rapid and stable development of the economy provides favorable conditions to build infrastructure in African countries including Algeria, Nigeria, Equatorial Guinea, Angola and more. The contracts include development project in roads, housing, utilities, and other infrastructure. 14
    15. 15. (Ⅲ) Project contracting market in Africa 2. China-Africa relations China-Africa relations have lasted for half a century. The strong relationship has paved the way for economic and trade cooperation between China and Africa, while greatly promoting cooperation in project contracting . In 1971, with the 1956, China support of allies In 2000, China- established in Africa, China Africa diplomatic resumed Cooperation relations membership in Forum was with Egypt the UN founded In late-1963 to In In 2006, the early 1995, Chinese China-Africa 1964, Premier President Jiang summit held Zhou Enlai visited Zemin visited in Beijing 10 countries in Africa Africa 15
    16. 16. (Ⅲ) Project contracting market in Africa 3. Chinese enterprises in Africa • From 1970s to 1980`s , there were mostly self-financed projects. From 1976-1985 project contracts signed between China and African The initial countries totaled to $1.131 billion, completed turnover was about $334 stage million. • From 1980s to 1990s: the four principles of China-Africa economic cooperation, "equality and mutual benefit, seeking practical results, diversity, and common development," were established. China Progressive experienced rapid growth in contracted projects in Africa. In 1994, the development establishment of “Export-Import Bank of China“ provided support for stage more contracted projects in Africa. Also in 1994, new contracts between China and African countries amounted up to $715 million, and complete turnover of $614 million. • From 1990S to now: With the establishment of China-Africa Cooperation Forum, Chinese enterprises in Africa entered a new rapid Rapid growth stage. In 2009, Chinese enterprises in Africas market share growth stage reached 36.6%, more than the sum of all other European contractors, ranking first among all. 16
    17. 17. (Ⅲ) Project contracting market in Africa 4. Future cooperation between China and Africa (1) China-Africa economy and trade are highly complementary Africa is a continent with a large population, abundant resources and great potential for development, helping it to maintain rapid growth in recent years. China, on the other hand, has a huge market, extensive development experience, capital, technology and personnel that African countries need. Currently, a large number of strong and reputable Chinese enterprises are eager to "go out” and invest in Africa (2) Great efforts to build infrastructure in Africa At present, Africa has and will invest large amounts of capital into infrastructure construction. In 2010 African Development Bank committed to financing $100 billion through various channels for infrastructure construction in African countries. African countries are already in planning stages. 17
    18. 18. (Ⅲ) Project contracting market in Africa  South Africa announced it will invest $78 billion in infrastructure development, including energy, transportation, and housing  Kenya announced it will issue bonds of $4.5 billion to raise financial resources for infrastructure  Nigeria plans to invest $ 8 billion in port construction and maintenance upgrades  Mauritius plans to invest $800 million for a large-scale improvement in transportation infrastructure  Ethiopia has received a loan totaling $3.3 billion dollars from the African Development Bank for the construction of a connecting highway linking Kenya with Ethiopia. 18
    19. 19. (Ⅲ) Project contracting market in Africa 4. Future cooperation between China and Africa (3) The advantages of Chinese enterprises  Over the past 50 years, China has been involved with 525 infrastructure projects in African countries, and has established a high reputation due to the high level of cooperation between Chinese and African firms. This has made Chinese enterprises widely recognized in African countries.  The China-Africa Cooperation Forum has created favorable conditions for Chinese enterprises to cooperate with African countries. In 2006, the Beijing based China-Africa Cooperation Forum launched its campaign to continue developing Sino-African relations. In November 2009, the China-Africa Cooperation Forum was held in Egypt, and the Chinese government launched a new program, designed to vigorously promote cooperation in infrastructure construction.  Chinas economic support to Africa. The Chinese government is prepared to provide over $100 billion dollars in preferential loans to Africa, while increasing the overall financing capacity of continent at large. It also will allow Chinese financial institutions to establish a special fund of $10 billion for SME development in Africa, while remit government interest- free loans and overdue debt relief that was scheduled to end in 2009. 19
    20. 20. Contents I. Chinese enterprises overseas project market development II. Chinas main project cases III. Current Chinese Overseas Engineering Project Management Situation IV. Current International Project Management Features V. How To Manage Chinese Engineering Contractors 20
    21. 21. Ⅱ. Chinas main project cases (Ⅰ) The world-class projects cases in China 1. The worlds largest hydropower project - the Three Gorges Dam 2. Shanghai Jinmao Tower 3. The worlds highest and longest plateau railway - Qinghai-Tibet Railway (Ⅱ) Chinese Contractors Remarkable Projects in International Market 1. Venezuelas Northern Plains Rail System (Tinaco to Anaco rail section) 2. COCA CODO-SINCLAIR Hydropower Project in Ecuador 3. Universal Studios Singapore (Ⅲ) Chinese Contractors Remarkable Projects in Africa 1. Highway projects :Algeria East-West Highway Project ; Highway project from Addis Ababa to Adama in Ethiopia 2. Railway projects : Railway Modernization Project in Nigeria 3. Water conservation and hydropower :Sudan Merowe Dam ; Tekeze Hydropower Station in Ethiopia 4. Housing project : Algeria International Conference Center ; Social housing project in Angola 21
    22. 22. Ⅱ. Chinas main project cases (Ⅰ) The world-class projects cases within China 22
    23. 23. (Ⅰ) The world-class projects cases in China 1. The worlds largest hydropower project - the Three Gorges Dam • General Contactor: CGGC (assumed 70% of the construction task) • Total investment: 203.9 billion RMB • Construction period: 17 years – Phase 1: 1993 – 1997 – Phase 2: 1998 - 2003 – Phase 3: 2004 – 2009 • Project Description: Three Gorges Project is the worlds largest water conservancy project, and is a world leader in stand-alone capacity, installed capacity, annual energy output, project size, and metal structure. 23
    24. 24. (一)中国国内世界级的工程项目案例 24
    25. 25. (Ⅰ) The world-class projects cases in China 2. Shanghai Jinmao Tower • General Contractor: Shanghai Construction Engineering Group • Project Size: The Shanghai Jinmao Tower project covered and area of 290,000 square meters, 91 floors, and stood over 420 meters tall. • Total Contract Amount: 5 billion RMB • Construction period: May 1994 -March1999 • Project Profile: The Jin Mao Tower is located in Shanghai‟s Pudong district, a Lujiazui Finance and Trade Zone beside the Huangpu River. The Jin Mao tower is over 420 meters tall, and is the third highest the skyscraper in both Shanghai and China and is the 8th tallest in the world. Construction began in 1994, and was completed in1998. 88 floors are above ground, and when coupled with the lobby and basement it increases to 93. The tower has 130 lifts and 555 rooms. It has been become a landmark of Shanghai, and has evolved into a modern office building, five-star hotel, convention center, entertainment complex, and shopping mall. It is a true blend of Chinese and Western construction techniques, and is a multifunctional skyscraper. 25
    26. 26. (Ⅰ) The world-class projects cases in China 3. Qinghai-Tibet Railway • General Contractor: China Railway Group Limited • Total length: 1956 kilometers. A high altitude project, over half of the Qinghai-Tibet railway was built at an elevation 4000 meters above sea level, with its highest point reaching 5072 meters. • Total contract amount: 33 billion RMB • Construction period: – Phase 1: sub-project construction started in 1958,May 1984 section was opened to traffic – Phase 2: Began June 2001 and was completed by July 2006 • Project Description: The Qinghai-Tibet Railway is one of China‟s four major projects in the 21st century, and is a milestone that marks the implementation of a Western development strategy. This railway links east of Xining, Qinghai with west of Lhasa, Tibet. The Qinghai-Tibet Railway is the worlds highest and longest plateau railway 26
    27. 27. Ⅱ. Chinas main project cases (Ⅱ) Chinese Contractors Remarkable Projects in International Market 27
    28. 28. (Ⅱ) Chinese Contractors Remarkable Projects inInternational Market 1. Venezuelas Northern Plains Rail System (Tinaco to Anaco rail section) • General Contractor: China Railway Engineering Corporation (July 30, 2009 signed a general construction design contract) • Total contract amount: $7,500,000,000 • Size of project: Total length of 471.5 km, running through four states in northern Venezuela: Cojedes,Guarico,Aragua,Anzoátegui.The railway is designed to double electrification and operate at speeds in excess of 220 km/h. • Construction period: 40 months, is expected to be completed in 2012 • Project portfolio: To date, this is the largest contract signed by Venezuela, and is also the largest overseas railway construction general contract that Chinese enterprises have successfully bid upon. 28
    29. 29. (Ⅱ) Chinese Contractors Remarkable Projects inInternational Market 2. COCA CODO-SINCLAIR Hydropower Project in Ecuador • General Contractor: China Hydropower Construction Group • Contract amount: $2.3 billion • Construction period: 66 months • Project profile: The total installed capacity of COCA CODO-SINCLAIR Hydropower station is 1.5 million kilowatts. It has the largest amount of foreign investment and is the largest hydropower project in Ecuador. Its annual generating capacity is 8.8 billion kWh. When complete, the project will meet one-third of Ecuador‟s population‟s electricity demand. 29
    30. 30. (Ⅱ) Chinese Contractors Remarkable Projects inInternational Market 3. Universal Studios Singapore • General Contractor: China Jingye Engineering Co., Ltd. • Total contract amount: $1 billion • Construction period: 18 months, from August 2008 to March 2010 • Project Profile: Universal Studios Singapore is a Worlds flagship project, costing nearly $4.4 billion to build its Sentosa Resort. Universal Studios covers an area of 20 hectares , and the construction cost is over $1 billion. The park is designed to accommodate up to 30 thousand peoples per day. It is the fourth Universal theme park worldwide, and the first Universal Studios park in Southeast Asia. Jingye Co.,Ltd. was able to overcome the problems associated with working in high-temperature heat and rainy weather. The project featured 24-hour non-stop construction, and utilized a number of new technologies, new processes and new materials during both the design and construction process. 30
    31. 31. Ⅱ. Chinas main project cases (Ⅲ) Chinese Contractors Remarkable Projects in Africa 1. Highway project :Algeria East-West Highway Project ; Highway project from Addis Ababa to Adama in Ethiopia 2. Railway projects : Railway Modernization Project in Nigeria 3. Water conservation and hydropower :Sudan Merowe Dam ; Tekeze Hydropower Station in Ethiopia 4. Housing project : Algeria International Conference Center ; Social housing project in Angola 31
    32. 32. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica 1.Chinese Highway Projects in Africa 32
    33. 33. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica (1) Algeria East-West Highway Project • General Contractor: Joint Venture between CITIC Group and China Railway Construction Corporation • Contract Amount: $6.25 Billion • Project size: 1216 kilometers • Construction Period: 40 months • Project Profile: The Algeria East-West Highway project is divided into 3 sections: Eastern, Central, and Western. The project is to design a two- way, 6-lane highway that allows for high-speed travel. This project is the largest example of an exchange of international tenders since the founding of the People‟s Republic of China in 1949. This project also marks the first time European specifications and standards have been successfully followed by a Chinese overseas contractor utilizing mainly Chinese labor and equipment. 33
    34. 34. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica (2) Highway project from Addis Ababa to Adama in Ethiopia • General Contractor: China Communication Construction Company Limited • Contract amount: $709 million • Construction period: June 2010-May 2014 • Project profile: The project‟s design length is 79.6 km. It is a full interchange highway of six full closed and two-way lanes. This project is based on Chinese road standards and designs. The project is the first expressway in Ethiopia, and when complete, it will greatly improve transportation conditions in Ethiopia. 34
    35. 35. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica 2.Chinese Railway Projects in Africa 35
    36. 36. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica Railway Modernization Project in Nigeria • General Contractor: China Civil Engineering Construction Corporation • Contract amount: $8.3 billion • Construction period: 2006 - 2015 • Project Profile: The Railway Modernization Project in Nigeria constructs of a two-lane standard gauge railway from the southern city of Lagos to the northern city of Kano. The railway is 1315 km long and is design for speeds up to 150 km/hour. The project contract amounts to $8.3 billion. This capital is funded by a $10 billion low-interest soft loans provided by the Export- Import Bank of China. China Civil Engineering Construction Corporation is responsible for the entire project including design, procurement, and construction. This is the largest international engineering contracting project that Chinese enterprises have contracted. 36
    37. 37. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica3.Chinese Water Conservation and Hydropower Projects in Africa 37
    38. 38. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica (1) Sudan Merowe Dam • General Contractor: A consortium of Chinese international water and electric corporations and Sinohydro Corporation • Contract amount: $1.6 billion to $1.8 billion • Construction period: 2003 – 2009 • Project profile: Merowe Dam is 9.7 km in length. It is the longest dam in the world. It is located 350 km north of Khartoum, the Sudanese capital. Merowe Dam‟s functions include power generation and irrigation. It has a capacity of 12.45 billion cubic meters, and total power installed capacity of 1.25 million kilowatts, which is more than 2 times the existing installed capacity in Sudan. It has an irrigation area of 100 hectares, thus benefitting 400 million Sudanese. 38
    39. 39. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica (2) Tekeze Hydropower Station in Ethiopia • General Contractor: Sinohydro Corporation and CGGC • Contract amount: $224 million • Construction period: 5 years • Project Profile: Tekeze Hydropower Station in Ethiopia is an important project for the economic development and the improvement of living conditions in Ethiopia. Tekeze Hydropower Station‟s functions include water conservation, power generation, irrigation, and more. It is the largest hydropower station in the country and is commonly referred to as Ethiopias "Three Gorges Project." The project installed 4 power units of 75,000 kilowatts, with a total installed capacity of 30 million kilowatts. Its is 188 meters in height, making it Africas highest thin arch concrete hyperbolic. After the station was completed, the total installed capacity of Ethiopia increased nearly 30%, greatly contributing to Ethiopia‟s economic development. 39
    40. 40. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica 4.Chinese Housing projects in Africa 40
    41. 41. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica (1) Algeria International Conference Center • General Contractor: China Construction Group • Contract amount: 50 billion RMB • Construction period: 31 months • Project Profile: Algeria International Conference Center building covers 230,000 square meters. It is composed of a 600-person lecture hall, 600- person conference room, 300-person representative hall, 15,000 square meters exhibition hall, separate meeting areas, national and head areas and a large number of auxiliary buildings. It can hold up to 20,000 people. 41
    42. 42. (Ⅲ) Chinese Contractors Remarkable Projects inAfrica (2) Social housing project in Angola  General Contractor: CITIC Group Guohua Company  Total Contract Amount: $3.5 billion  Project size: 20 apartments, 24 kindergarten schools, 9 primary schools, 8 secondary schools and one water pump station producing 40,000 tons of water per day and one sewage treatment plant capable of processing 3.5 million tons of waste per day. 2 60KV/15KVsubstations, 13 switching stations, 77 substations, and water supply systems, sewage systems, drainage systems, traffic signal systems, electrical systems, communication systems, roads and other infrastructures  Construction period: 38 months  Project Profile: The Angola social housing project uses EPC/turnkey project control, and the owner is the Angolan government reconstruction committee, and CITIC Group Guohua is the licensed general contractor. 42
    43. 43. Contents I. Chinese enterprises overseas project market development II. Chinas main project cases III. Current Chinese Overseas Engineering Project Management Situation IV. Current International Project Management Features V. How To Manage Chinese Engineering Contractors 43
    44. 44. Ⅲ. Current Chinese Overseas Engineering Project Management Situation (Ⅰ) Evaluation of Existing Management (Ⅱ) Main Advantages of Chinese Contracting Companies (Ⅲ) Main Challenges of Chinese Contracting Companies 44
    45. 45. (Ⅰ) Evaluation of Existing Management After 20 years of overseas expansion, China has made remarkable achievements in engineering project management including the following: 1. Achieved excellent engineering performance 2. Achieved engineering contract diversification 3. Established organizations compatible with general contracting function 4. Established general contracting project management system 5. Achieved advanced project management skill among select enterprises 6. Trained a great number of project management professionals 45
    46. 46. Ⅲ. Current Chinese Overseas Engineering Project Management Situation (Ⅱ) Main Advantages of Chinese Contracting Companies 46
    47. 47. (Ⅱ) Main Advantages of Chinese Contracting Companies 1. Cost-price advantage (1) Materials Full range of cost-effective materials from China such as electronic accessories, steel, furniture, etc. The materials can meet European standards and have significant price advantage. (2) Human resources Abundant human resources with high efficiency and skilled expertise (3) Equipment Provision of cost-effective engineering equipment set. Chinese equipment has capital, labor, technology intensive characteristics, high performance-low cost, and more applicable to many developing countries in Asia and Africa. 47
    48. 48. (Ⅱ) Main Advantages of Chinese Contracting Companies 琐琐碎碎 琐琐 2. Skill and Management Advantages (1) Professional skills: Experienced in hydropower, roads and bridges, housing construction, etc.; Advanced technical level in international projects For example, Chinese enterprises have built the worlds largest steel reinforced concrete dam; the worlds highest railway(5, 072m above sea level); and various other world-class engineering projects (2) Skilled workers: Professional skills and highly efficient (3) Management level: Technology output and management-intensive combination significantly enhances the management level. (4) Diligently promote localization of management 琐琐碎碎 48
    49. 49. (Ⅱ) Main Advantages of Chinese Contracting Companies 3. Financial Advantage (1) Strong Self-funding Capability Most of Chinas contracting companies are state own enterprises or private enterprises with strong financial capacity, allowing them to undertake large projects. In 2009, 50 Chinese enterprises were selected into the list of ENR‟s “worlds top 225 largest international contractors", the total turnover increased about 57.1%, accounting for 9.15% of total turnover of 225 enterprises China has the fourth most contracting companies in the ranking among all nations. There are 16 total Chinese companies in the top 100 contracting companies. The number of Chinese enterprises to enter the ENR “The world ‘s largest international contractors” 47 47 49 49 49 51 50 54 39 43 33 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 49
    50. 50. (Ⅱ) Main Advantages of Chinese Contracting Companies (2) Strong Financing Capability: China has abundant capital The proportion of reserves, meaning Chinas banks can China`s capital in total provide long-term and low-cost credit tender`s amount for overseas projects Chinas capital Others (3) China„s Abundant Foreign Exchange Reserves: 28% China‟s foreign exchange reserves reached to $ 2.454275 trillion US 72% dollars in June 2010. This can provide a solid economic foundation for Chinas overseas engineering contracts. 50
    51. 51. (Ⅱ) Main Advantages of Chinese Contracting Companies 4. Policy advantage (1) “Going out" Strategy From "going out" special funds to the loan interest subsidy and other subsidies, China intensively issued a series of policies in the short term to support enterprises in "going out”. These policies provide great support for companies that are developing overseas. (2) Support Policy Chinas export tax rebate policy significantly reduces the cost of procurement of materials, equipment, etc. from China, and enhances China‟s competitiveness in overseas contracting projects for Chinese companies 51
    52. 52. (Ⅱ) Main Advantages of Chinese Contracting Companies 4. Policy advantage (3) National Industrial Position: The industry position of developed countries such as Europe and the United States are based mainly on innovation, core technology products, and capital goods such as machinery tools, equipment, etc. China relies on vast labor and reserves of its economy, primarily in exports and external investments. (4) Cooperative relationship Cooperative relationships between China and its neighboring countries allows China to maintain a deep and friendly relationship with third world countries in Asia and Africa. 52
    53. 53. (Ⅱ) Main Advantages of Chinese Contracting Companies 5. Emotional and cultural advantages (1) Hold strong political relations (2) Share common goals with developing countries (3) Cooperate effectively to achieve win-win situation and harmony (4) Hold national spirit 53
    54. 54. Ⅲ. Current Chinese Overseas Engineering Project Management Situation (Ⅲ) Main Challenges of Chinese Contracting Companies 54
    55. 55. (Ⅲ)Main Challenges of Chinese Contracting Companies 1. Non-rational tender (1) Lower cost and lower bidding price lead to heavy competition. (2) If price is too low, competitive bidding is not considered sufficient, thus leading to increased risk. (3) Underestimation of the auction items and their strength. 55
    56. 56. (Ⅲ)Main Challenges of Chinese Contracting Companies 2. Prices increase (1) Raw material prices increase such as cement, steel, etc. International market demand for steel increases and steel prices continue to rise (2) Increased labor costs (3) Appreciation of RMB and domestic procurement costs, and increase in exchange rate risks 56
    57. 57. (Ⅲ)Main Challenges of Chinese Contracting Companies 3. Communication problems (1) Linguistic capacity Case:Project Management conflicts (2) Communication rules and skills Case:Minutes of Meeting (3) Familiarity with local culture and customs Case:Attire, Company Email 57
    58. 58. (Ⅲ)Main Challenges of Chinese Contracting Companies 4. Regular Standards (1) China‟s standards lack foreign language versions (2) Promotion of China‟s standards is not sufficient and is not recognized overseas (3) China need to improve company standards (4) Chinese enterprises have failed to fully converge with international standards 58
    59. 59. (Ⅲ)Main Challenges of Chinese Contracting Companies 5. Different management systems (1) Organization and project management systems are different (2) Cannot fully integrate with the international management system (3) Project management team is too centralized (4) Lack of regional headquarters 59
    60. 60. (Ⅲ)Main Challenges of Chinese Contracting Companies 6. HSE awareness, social responsibility, and brand awareness are lacking (1) Lack of knowledge of HSE, level of HSE is insufficient (2) Safety standards needs to be improved (3) Social responsibility needs to be strengthened (4) Lack of awareness for brand importance, lack of experience to promote own competitive advantages and characteristics 60
    61. 61. (Ⅲ)Main Challenges of Chinese Contracting Companies 7. The main problems in management 26 26 25 22 18 18 17 17 17 16 16 Based on the survey of 30 Chinese engineering contractors on 8 July 2010 61
    62. 62. Contents I. Chinese enterprises overseas project market development II. Chinas main project cases III. Current Chinese Overseas Engineering Project Management Situation IV. Current International Project Management Features V. How To Manage Chinese Engineering Contractors 62
    63. 63. Ⅳ. Current International Project Management Features (Ⅰ) Integration (Ⅱ) Standardization (Ⅲ) Specialization (Ⅳ) Information (Ⅴ) Internationalization 63
    64. 64. Ⅳ. Current International Project Management Features (Ⅰ) Integration 1. In the past 5 years, Chinas international project contracting business volume is equivalent to the total volume in the past 20 years. The overall annual growth rate is 30% , while the ranking is also rising; 15 times in the last 15 years 2. In 2009, international projects undertaken by Chinese contractors amount to more than $50 million US dollars, constituting 51% of total bids and 94% of total contracts 3. In 2000, there were 9 total projects valued over $100 million US dollars; in 2009, there were 240. 4. There are relatively more EPC and the D & B projects (more than half of the total projects). The average project value of the first half of 2010 reached $483 million US dollars, and in 2009 was $324 million US dollars. Year 2004 2005 2006 2007 2008 2009 Turnover of Chinas international contracted projects ($100 million 174.7 217.6 300 406 566 777 US dollars) 64
    65. 65. Ⅳ. Current International Project Management Features (Ⅱ) Standardization 1. Procedures 2. Forms 3. Regulations 4. Information 5. Training 65
    66. 66. Ⅳ. Current International Project Management Features (Ⅲ) Specialization 1. Professional Software e.g. Primavera, @Risk, Project etc. 2. Subcontract team and service team specialization Case:3600T Crane 3. Each link connecting closely and directly 4. The application of professional management techniques 5. Refine specification of inner work Control, contract, design, quality, procurement, construction, HSE, labor, testing, coor dination, Document Control and others Don`t match of Professional division of labor become an progress obstacle of many enterprises. Case:The Organization chart of an construction project in Australia. 66
    67. 67. Ⅳ. Current International Project Management FeaturesCase: 琐琐碎碎 琐琐Owner’s TeamEPCM Team571 Positions 琐琐碎碎 The Organization chart of an construction project in Australia. 67
    68. 68. Ⅳ. Current International Project Management Features (Ⅳ) Informatization 1. Full use of network e.g. MSN, Aconex, Email and Variety of network platforms. 2. Rapidly in response Case:Contract Termination Notice,Focal Point 3. Orderly distribution Appropriate for integration of general understanding and precise control. 68
    69. 69. Ⅳ. Current International Project Management Features (Ⅴ) Internationalization 1. Labor : International Labor 2. Material: Global Procurement 3. Management: Consulting Company 4. Finance, Exchange Rate and Taxation 69
    70. 70. Contents I. Chinese enterprises overseas project market development II. Chinas main project cases III. Current Chinese Overseas Engineering Project Management Situation IV. Current International Project Management Features V. How To Manage Chinese Engineering Contractors 70
    71. 71. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅰ) Pursuit of sustainable development (Ⅱ) Give up low price tender strategy (Ⅲ) Standardized project management method (Ⅳ) Adopt flexible and realistic standards and management methods (Ⅴ) Strengthen management of project implementation phase (Ⅵ) Choose high-quality consulting company and cultivate localized management talent (Ⅶ) Guide localization of Chinese engineering contractors (Ⅷ) Improve professionalism of Chinese contractors (Ⅸ) Provide the necessary support and assistance to the Chinese engineering contractors (Ⅹ) Maintain a stable political environment and prepare adequate financial resources 71
    72. 72. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅰ) Pursuit of sustainable development 1. Planning of infrastructure system should be swift, but the implementation can be conducted step by step 2. Design is the source of the whole project and must be controlled with high standards and high quality construction, refined details argument and control 3. Protect eco-environment 4. Pay attention to facility‟s humanization 72
    73. 73. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅱ) Give up low price tender strategy 1. Difficult to ensure project quality and safety 2. Influences on-schedule project completion 3. Leads to operating phase investment increase by the owner 4. Promotes construction companies to make poor decisions by increasing changes 5. Corrosive to a clean and honest construction administration. 6 Hinders the healthy development of the entire construction industry 73
    74. 74. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅲ) Standardized project management method 1. Adopt cross-border operation and international management of large-scale projects 2. Specify and refine the specification of work Including design, construction, procurement, contract, HSE, quality, document control, etc. 3. Make use of advanced software Such as Primavera, @ Risk, Exp, and other software to make project management more efficient 4. Improve the use of information and make full use of network resources Such as Aconex, email and various network platforms 5. Introduce high-quality consulting firms into China and train owners and contractors 6. Focus on audit of contractor organization and management 74
    75. 75. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅳ) Adopt flexible and realistic standard and management methods 1. Adopt Chinese standards (1) After 30 years of development, Chinese standards have formed a complete set of engineering and technical specifications (2) Chinas engineering and technical specifications are self-contained by reference to Western standards, covering all areas of engineering. Its level are not lower than or higher than the standard level in Europe and US. For example, Chinas pier standards v. U.S. pier standards (3) The English text version of Chinese standard will be available soon and is committed to being promoted globally (4) Chinese standards and specifications can ensure the quality of the project (5) Chinese managers and practitioners have become more familiar with Chinese standards, therefore project management and implementation has become more smooth 75
    76. 76. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅳ) Adopt flexible and realistic standards and management methods 2. Appropriate use of Chinese materials; quality control of materials 3. Adopt Rewards and Incentive System 4. Properly consider profit sharing 5. Introduce competition mechanism into China 6. Reduce management process 76
    77. 77. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅴ) Strengthen management of project implementation phase 1. Determine reasonable project period 2. Enhance communication with the contractor 3. Take positive measures to prevent and respond to risks 4. Pay attention to details of the contract; increase depth of the contract; strictly determine the scope of the contract; reduce variations and unforeseen factors 5. Process variations claim in time when variation matters occur 6. Strictly supervise subcontractor management 77
    78. 78. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅵ) Choose high-quality consulting company, cultivate localized management talent 1. Communicate with Chinese organizations, find high-quality consulting firms, manage Chinese with Chinese. For example, a Chinese project management firm in international project management (1) From the language factor, they can fully communicate with the owner and the Chinese contractor (2) From the management factor, they are familiar with both Western and Chinese project management concepts and thus can manage more effectively 2. Hire professional supervision teams (1) Familiar with local legal requirements (2) Familiar with local customs 78
    79. 79. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅵ) Choose high-quality consulting company, cultivate localized management talent 3. Strengthen training of the management team and construction team for going abroad 4. Demand the management company and main contractor to train local staff 5. Cultivate localized talents and arrange acceptable training of talents in the management company or in the main contractor company 79
    80. 80. Ⅴ. How To Manage Chinese Engineering Contractors Quality: good personal qualities, positive team attitude, pursuit of excellence, be respectful Information Quality Habits: responsible work habits, smooth functioning of the team, maintain high level of work efficiency Thinking: clear thinking is a fundamental condition of a Procedure Habits good project manager Professional: appropriate division of labor, make full use of favorable conditions and promote complementarities; Professional Thinking everybody can be a talent Procedure: in modern management one must follow procedures to improve program management Information: appropriate and adequate information sharing contributes to the team‟s efficiency Six Supporting Points
    81. 81. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅶ) Guide localization of Chinese engineering contractors 1. Help Chinese contractors establish stability offices in local area 2. Encourage Chinese contractors in achieving localization of human resources 3. Strengthen the communication with the Chinese contractors overseas offices 4. Guide Chinese contractors to understand and respect local customs 81
    82. 82. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅷ) Improve professionalism of Chinese contractors 1. Increase their self-regulation level 2. Cultivate a good sense of time and improve work efficiency 3. Emphasize commitment and promise 4. Act in accordance with contractual specifications 5. Familiar with international business and cultural etiquette 82
    83. 83. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅸ) Provide the necessary support and assistance to the Chinese engineering contractors 1. Establish a win-win concept and enhance service awareness 2. Provide necessary assistance to labor input Such as: visa processing 3. Assist the contractor to complete the necessary approvals 4. Assist contractors to adapt to local environment in a timely manner 5. Help speed up the rate of cash flow 83
    84. 84. Ⅴ. How To Manage Chinese Engineering Contractors (Ⅹ) Maintain a stable political environment and prepare adequate financial resources 1. Stabilize political environment For example, political controversy may affect the progress of the project 2. Maintain policy‟s continuity 3. Establish clear decision-making systems and institutions 4. Prepare adequate financial resources and make use of Chinas financial advantages 5. Rationally use resources to enhance operational capacity of capital 6. Process payments in a timely manner 84
    85. 85. Questions & Discussion Questions & Discussion 85

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