(1) Mainland China has embarked on an ambitious infrastructure development program, spending over $1 trillion on expanding rail networks, building new bridges and dams. (2) Key factors for success in mega-infrastructure projects include Confucian/authoritarian management styles, public-private partnerships utilizing state-owned contractors, and guanxi (connections/relationships) for stakeholder management. (3) The proposed 50km Hong Kong-Zhuhai-Macau Bridge project connecting the three regions presents new challenges due to differences in legal/regulatory systems, but thorough advance planning including clear financial and scope agreements between governments has helped prepare for its construction.

1. PPP in mega infrastructure projects:
perspectives from Mainland China
Dr. Wilson Lu
Assistant professor, Department of Real Estate and Construction, The University of Hong Kong,
Hong Kong, wilsonlu@hku.hk

2. Three Gorges Dam

3. Hangzhou Bay Bridge

4. China plans to spend
more than $1 trillion on
expanding its railway
network from 78,000
km today to 110,000
km in 2012 and 120,000
km in 2020.
China has embarked on the second
largest public works program in history,
following only the Eisenhower Interstate
Highway System in size.
Major projects
In China
The ambitious high-speed railway pla

6. Keys to succeed in these giant infrastructure projects
(1)Confucianism/authoritarian management
(2) public – public/private partnership
(3) “Guanxi, ubiquitous guanxi!” – A Chinese way to
manage stakeholders
(only my personnel views)

7. Confucianism/authoritarian project management
1.1 A powerful central government to coordinate the stakeholders in
local authorities
1.2 Largely, project management style is still the traditional
command and control style
A “nail house’ in Zhejiang, ChinaNIMBY in China

8. Public – Public/Private Partnership
(1) Many large-scale contractors are state-owned enterprises
(2) They are often associated to main clients of infrastructure project,
e.g. Ministry of Transportation (Road), Ministry of Railway
(Railway)
(3) Contractors in some cases will build roads, public rental building
projects for local governments (councils) and the later will
purchase back these projects when the fund is becoming
available.

9. intriguing
exotic
mysterious
daunting
Gale and Luo (2004), International Journal of Project
Management
Wang et al. (2006),
Construction
Management and
Economics
Lu et al. (2008), ASCE CEM
Kwan and Ofori (2001), CME
Fellows et al. (2003),
Construction Management and
Economics
“guanxi, ubiquitous guanxi!” – A Chinese
way to manage stakeholders

10. Stakeholder management
Stakeholder (利益相关方[Mainland China]，持份者[Hong Kong])
High speed railway project land reclamation in Hong Kong

11. Demystify Guanxi - definitions

12. Guanxi
LocalityLocality
ClassmateshipClassmateship

13. Guanxi
LocalityLocality
ClassmateshipClassmateship

14. Messages
• Has Guanxi been overstated? Not simply yes or no
• Guanxi is not that mysterious; you are familiar with
it; you can handle it.
• Negative aspects of Guanxi will phase out
• Develop your competitive advantage in China’s
construction industry through developing long-
term Guanxi

15. Hong Kong-Zhuhai-
Macau Bridge
The proposed 50 kilometres
(31.1 mi) bridge is expected to cost
US $10.7 billion
A proposed series of bridges and
tunnels that would connect Hong
Kong to Macau and Zhuhai.
Construction formally began on
15 December 2009. It is due to
be completed in 2016
New challenges in Hong Kong –
Zhuhai – Macau Bridge

16. Hong Kong-Zhuhai-Macau Bridge
It consists of a Main Bridge in Mainland waters together with
the boundary crossing facilities (BCFs) and link roads within
the three places.
The HZMB Main Bridge runs from the artificial island off
Gongbei of Zhuhai to the eastern artificial island for the
tunnel section just west of the HKSAR boundary.
New challenges in Hong Kong –
Zhuhai – Macau Bridge

17. New challenges in Hong Kong –
Zhuhai – Macau Bridge
Socialism,
Continental laws, GB
standard,
environment
awareness …
Capitalism,
Common
laws, BS
standard …
??????…

18. Well planning ahead
In August 2003, the State Council agreed that the three local governments
should set up the Advance Work Co-ordination Group (AWCG) and press
ahead with the advance work for the construction of the Bridge. The AWCG
consists of three representatives from each of the three governments
of Guangdong , HKSAR and Macao SAR.
Clear financial arrangement – there must be a leader in presence
The three governments in March selected the Bank of China as
the lead bank to form a consortium to provide loans for the
main body of the HZMB.
Clear scope and responsibility
Three sides agreed that the three Governments would be responsible for the
construction and operation of the boundary crossing facilities and the link
roads to the bridge within their own territory.
The HZMB Main Bridge runs from the artificial island and artificial island for
the tunnel section just west of the HKSAR boundary.
More informatin to be found via http://www.hzmb.hk/eng/index.html and
http://www.thb.gov.hk/eng/policy/transport/issues/cbt_3.htm

19. Thank you!