Webinar: How to successfully target and secure OBOR projects Live webinar: October 25, 2017, 10:00am Hong Kong / 1:00pm Sydney. The Asia Pacific region is a key part of China's One Belt One Road (OBOR) initiative. However, given the diversity of governance systems and procurement structures in Asia Pacific countries, securing involvement in OBOR projects is far from straightforward. A strategy tailored to political, legal and economic factors, amongst others, is critical to achieving success in navigating potential pitfalls that may lead to fatigue and failure.

1. CONFIDENTIAL |
How to successfully target and
secure OBOR projects
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2. CONFIDENTIAL |
• All participants are being muted. Please use the Q&A chat box for questions.
• This online seminar will be recorded.
• We will send you the webinar recording after the event
About this webinar
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Speakers
Justin Tan
Partner
Clyde & Co
Andy Lake
General Manager, Asia
Aconex

4. Justin Tan, Partner, Singapore
Key Considerations to Securing
OBOR Projects in the APAC region

5. 5
Belt & Road Initiative – A brief introduction
➢ Recent moderation in growth of
the PRC driven by structural
factors:
▪ Convergence and rising labour
costs
▪ Shift towards consumption-led
growth
▪ Shrinking working age population
▪ Low external demand and excess
capacity in several sectors
➢ In response to slowing GDP and
trade growth, amongst a set of
domestic and external reforms,
the PRC unveiled the OBOR
initiative

6. 6
➢ Silk Road Economic Belt: Overland network of road, rail and pipelines
connecting China’s east coast with Europe
➢ 21st Century Maritime Silk Road: Planned sea route with integrated port
and coastal infrastructure projects running from China to Europe, India,
Africa and the Pacific through the South China Sea and the Indian Ocean
➢ Main players are state-owned enterprises taking a contractor or sponsor
role, with financial institutions such as CDB, CEXIM, ICBC and SINOSURE
active in the infrastructure space
Belt & Road Initiative – A brief introduction

7. 7

8. 8
DIFFERENCES WITHIN KEY APAC MARKETS
IN OBOR

9. 9
Differing Geographic, Economic and
Political Situations
➢ Terrain may be harsh and unforgiving
➢ Regions plagued by territorial disputes and local wars,
religious extremism, corruption, tensions with neighbors
➢ Different levels of infrastructure in place
➢ Varying regulatory standards
➢ Low host country credit ratings
➢ Cultural and customary distinctions

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Differing Geographic, Economic and
Political Situations

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Differing Infrastructure Needs

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INFRASTRUCTURE SPENDING BY TYPE
Differing Infrastructure Needs

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Indonesia – Favourable Policy Reform
➢ Implementation of Presidential Regulation No.38/2015 to stimulate investment in PPP projects by expanding
eligible sectors and offering a more favourable legal framework.
➢ Land Acquisition Law: Amendments now limit the land acquisition procedure to 583 days and allows for
revocation of land rights in the public interest.
▪ Crucial as many projects (such as the Central Java Power Plant) were previously held up by extended
land acquisition disputes.
➢ BKPM, the Investment Coordinating Board, now provides a centralised licensing point for certain sectors
▪ Should see increase in the efficiency of the investment approval process
➢ The government has identified projects which have strategic value to Indonesia’s economy
▪ For strategic and priority projects, government agencies have central role in monitoring, coordinating and
speeding up the deliveries of those projects, sometimes commissioning or amending the feasibility
studies to prepare them for the market

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Indonesia – Challenges
➢However, key challenges still exist
▪ Much of the legal/regulatory framework remains unclear/convoluted
▪ Procurement processes not always clear and transparent
▪ Government policy and strategy is often unclear or subject to change at short notice
▪ Public organisations may be uncoordinated and have conflicting goals and policies
▪ High regulatory cost due to a large number of permits required to operate or construct
projects

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Indonesia – Government Support
SOURCE OF INFRASTRUCTURE
FUNDING 2015- 2019
GOVERNMENT SPENDING ON
INFRASTRUCTURE (IDR)

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LOCATIONS IDENTIFIED BY THE GOVERNMENT TO BE DEVELOPED

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The Philippines – Challenges
➢ The Philippines continues to be one of the strongest and fastest-growing economies in SEA
➢ Average GDP growth of about 6.3% since 2010
➢ But challenges to investment-led growth lie the in the significant gaps in the country’s infrastructure
▪ Major gaps in the country's roads, ports, airports, mass transit and energy
▪ Result of years of underinvestment and delays in implementing public capex, fiscal constraints,
weak governing institutions

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The Philippines – Infrastructure Deficiencies
➢ Infrastructure deficiencies translate to real cost to the economy in terms of productivity and efficiency
▪ Public transport – commuters report a commute of 3-4 hours every day, requiring several transfers from
tricycle, minivans, rail and bus from suburbs to Makati, Manila’s main business district
▪ Most roads operating at close to capacity – resulting in gridlocks
➢ Recently, Manila imposed a bank on 8-wheelers and vehicles with a gross weight of 4,500kgs from Manila’s
streets between 5am to 9am
▪ Without an alternative transport, it has been estimated that the economic cost of such ban to be about
USD 7.25 billion, putting at risk about 1 million manufacturing jobs. It has been warned that such
bottleneck could reduce GDP growth by 1-5%.

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The Philippines – Project Framework Reform
➢ Establishment of the Public-Private Partnership Centre
▪ Central coordinating and monitoring agency for all PPP projects
▪ Manages project preparation facility
▪ Providing project advisory and facilitation services
▪ Monitors and empowers agencies through various capacity building activities
➢ Institutional reforms:
▪ Creation of a PPP Governing Board as the policy-making body for all PPP-related
concerns; strengthens the monitoring of projects
▪ Standardisation of PPP contracts aimed at streamlining the drafting of concession
agreements and creating templates for implementing agencies by incorporating tested
procedures and lessons learned from previous PPP contracts

20. 20
The Philippines – Government Commitment

21. 21
The Philippines – Government Commitment

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Myanmar – Special Economic Zones
➢ Government promotes foreign investment through Special Economic Zones
▪ Favourable laws and practices for the production and export of products
➢ Thilawa Special Economic Zone near Yangon with Japanese investors
▪ Accounted for 12.5% of total investment into Myanmar in 2015 and 3% of total exports
▪ Foreign investment estimated to have hit USD 1.7 billion this year
➢ Dawei Special Economic Zone in the southern Taninthayi region with Thai investors
▪ Suspended due to financial difficulties but high level committee formed this year to restart the project
➢ Kyaukphyu Economic and Technology Zone in the western Rakhine state with Chinese investors

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Myanmar – Dire Infrastructure Needs
➢ Growth is expected to accelerate to 8–9% per year over the next 5 years driven by foreign investments in major projects
➢ However, government acknowledged that poor state of public infrastructure and services is a main impediment to the country’s
economic growth and development objectives
➢ Substantial need for large-scale investment in transport infrastructure
▪ In July 2016 Asian Development Bank officials stated that the sector was in need of USD45-60 billion of investment over
the next 15 years
▪ 20 million citizens are kept from road access
▪ 60% of highways and rail lines need urgent maintenance and repair
▪ Ports at critical levels of congestion, with vast majority of ships required to stay at the port for at least 11 days, compared
to a usual 3-5 days

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SUCCESSFUL TARGETING & SECURING
OBOR PROJECTS

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Guidelines to Securing OBOR Projects
➢ Know the particularities of the region you are targeting for investment
▪ Cultural sensitivity and awareness of a country’s political history
▪ Necessary understanding of the legal (or customary) frameworks
especially in emerging markets
➢ International move towards accountability, environmental sustainability and
transparency
▪ Demonstrate clear, streamlined processes and track record

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Guidelines to Securing OBOR Projects
➢ Understand approval processes of Chinese regulators and credit providers
▪ Keep structures and documentation simple
▪ Foreign investors not able to take key EPC, sub-contractor or supplier
roles due to requirements for Chinese participation
▪ Usually, the big 5 Chinese power companies hold majority
shareholding
▪ However, if your partner is a Chinese EPC contractor or supplier, you
may be able to negotiate a larger shareholding

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Risk Awareness
➢ Infrastructure investment from China to OBOR countries has been slowing
➢ OBOR’s lending programs have resulted in cheap credit and huge risks
➢ Some projects have been accused of having corners cut, ignoring safety standards,
using inferior materials and human rights violations

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Risk Awareness
➢ Construction of the Myitsone Hydropower Project in Myanmar suspended due to
NGO opposition in 2011
➢ Indonesian high speed rail delayed
▪ Chinese consortium received a permit to build only 5km of the proposed 150km
rail line
▪ Controversy as politicians have argued that it was too expensive and not suited
to local needs

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30. CONFIDENTIAL |
Featured Project:
Dubai International Airport | US $4.5B Value
Connecting teams project-wide
How to successfully deliver an OBOR project
Andy Lake
General Manager, Asia

31. CONFIDENTIAL |
• Case Study
• Summary of our learnings
• A very little bit about Aconex
Agenda
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32. CONFIDENTIAL |
Peshawar-Karachi Motorway (PKM) is 3,000 kilometer-long
project and it is a major component of the China-Pakistan
Economic Corridor.
This project aims to link Pakistan's three Arabian Sea ports to
the rest of the country through its national highways and
motorways network and further north with Afghanistan,
Central Asia and China.
Construction started: Jan 2016
Due to complete: 2018
China-Pakistan Economic Corridor: Peshawar-Karachi Motorway
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Karachi
Gwadar
Lahore
Multan
Sukkur
Hyderabad
Islamabad
Khunjerab
China-Pakistan Economic Corridor
Peshawar

33. CONFIDENTIAL |
Importance of Pakistan to China
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• Stable & reliable ally
• No competitors
• Strategic location
• Importance for peace “contains Afghanistan”
• Buffer against India
• Large potential market
• Low cost production base
• Direct access to the Arabian Gulf
• Test case for OBOR receiving country

34. CONFIDENTIAL |
Peshawar-Karachi Motorway Project (Sukkur-Multan Section)
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Sukkur
Multan
Lahore
Karachi
• Project size: $ 2.8 billion
• Region: Pakistan
• Project Overview:
• The Sukkur-Multan section is located in the
middle of the Sino-Pakistani economic
corridor.
• The project adopts EPC (design, procurement,
construction) general contract construction
mode.
• 90% of the project cost is funded by China
• Involved parties:
Various
subcontractors

35. CONFIDENTIAL |
Design
• Two-way six-lane highway
• Design speed of 120km
• Highway mileage of 392 kilometers
• 54 bridges including one major bridge
on River Sutlej
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36. CONFIDENTIAL |
Design
• 12 Service areas
• 10 Rest areas
• 11 Interchanges
• 10 Flyovers
• 426 Underpasses
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37. CONFIDENTIAL |
Project Key Challenges
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38. CONFIDENTIAL |
Various participating units
The project was divided into seven sub-
sections and a large number of participating
units.
There was a long physical distance between
them.
Document Management & Collaboration
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Various
subcontractors
Difficult to sort and retrieve
documents
Challenging to view, manage and
collaborate information across
different platforms.
Generated a large number of data
Data needed to be managed and
shared among project team
members.

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Chaotic Document
Version Controls
Workflow Management
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Workflow not transparent

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• Document browsing were
offline and scattered among
different users
• No mail and document
transfer trail records
• Challenging to get claims
and counterclaims proof
• No reminders and alerts for
any document changes
Information Requests
40

41. CONFIDENTIAL |
Solutions
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Project Control Platform
• Provide secure access to all
project team members
• Owners (NHA), consultants,
contractors and design divisions
are on a unified platform for
information collaboration
• Real-time access, publish and
track all documents and
transmittal, no matter what
location
• Provide desktop and mobile
access, improved work efficiency
24/7 Support
• Regular project visits and training
by Aconex consultants and our
partners.
• Provides multilingual access and
support to English and Chinese
language users
• Provide unlimited training and
support for all participants

42. CONFIDENTIAL |
Results
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Aconex was being used by the entire project team
Only 3 weeks of implementation time for the system
Users were able to master the system after taking the
training
All workflows, drawing reviews, contract reviews,
construction plan reporting, schedule approval process,
quality-related system approval, etc. across multi-
organizations were being collaborated within Aconex in a
single source of truth

43. CONFIDENTIAL |
• Supplier decisions are primarily made in China (we have seen only 1 exception)
• Project announcements can be made a long time ahead of funding being available
• Keep in simple with a clear value proposition – aim to solve their fundamental problems
• Local networking and traditional marketing has been interesting and educational but has
not lead to winning business
• Winning business has been about convincing China based decision makers of the value in
our solution in helping them solve their problems
• We have leveraged our partner network to help us sell and support
• We now have around 6 OBOR projects in Sri Lanka, EMEA, Malaysia and Pakistan and a
significant growing pipeline
What we have learnt so far
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44. Field
Inspections
Connecting teams project-wide
OperateConstructDesignBidPlan
Document
Control
RFIs &
Change
Orders
Bidding &
Tenders
Workflows &
Approvals
BIM
Collaboration
Submittals Handover to
Operations
Cost
Management
Dashboards
& Reporting

45. DELIVERING YOUR
PROJECTS WITH
CONFIDENCE
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the world’s leading construction and engineering
organizations
•200+ strong product development team
•Quarterly release cycle and platform upgrades
Proven engagement model
•Global industry experts that understand your business
•Consistent approach and quality with rapid
deployment and scale for individual projects and
large enterprise rollouts
•Global training and support for all participants
The leader in online collaboration
•15+ years of experience delivering purpose-built
solutions
•Proven success delivering the largest, most
complex projects and programs in the world
•Stable, public company (Listed on ASX:ACX)

46. CONFIDENTIAL |
Nine of the top 10
global EPCs
23 of ENR’s top 25
global design firms
Every Fortune 500
construction and
engineering firm
The leader in multi-party collaboration

47. CONFIDENTIAL |
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