Chinese builder COVEC interested in State-Private partnerships in Angola

20 February 2006

Beijing, China, 20 Feb – Chinese state construction company, China National Overseas Engineering Corporation (COVEC) is interested in setting up State-Private partnerships with the Angolan government and may finance some projects, the company’s deputy director-general said Monday in Beijing.

“Part of our strategy for entering the Angolan construction market involves taking part in international public tenders. If the project is very good, COVEC may even provide financing, after viability studies, as part of the State-Private Partnerships with Angola,” Shi Ping told Macauhub in an interview.

At the beginning of February COVEC finished building Luanda’s General Hospital, financed by the Chinese government, at a cost of US$8 million and took 15 months to build using 90 percent local labor.

“We are available to build any type of project in Angola, whether large or small,” said Shi, who added that construction using COVEC’s own financing, took longer as it required lengthy viability studies.

Shi also said that the construction of Luanda General Hospital was “an important step” for the company because it meant entering a market with great future potential; the Angolan market recovering after the civil war.

“During the war a large number of buildings were destroyed. People lived through difficult times and now they want peace, development and to change their lives for the better. This implies building housing projects – schools, infrastructures, hospitals – and COVEC would like to be involved in that effort,” Shi said.

COVEC was the first Chinese company to take part in international construction projects, industrial investment and supplying specialized staff. Since 1966, it has won contracts to a value of US$2.6 billion, with turnover of US$2.2 billion.

Taking part in projects in partnership with Portuguese construction companies, “is a possibility to be considered, because the language barrier sometimes causes difficulties and it is difficult to hire people who speak Portuguese in the Chinese market,” Shi said.

COVEC aims to win contracts worth US$600 million in 2006 and 2007, and of that total some US$100 million is expected to be from South and Southeast African markets, he said.

Shi also said that, “the Angolan market is also important because COVEC is already on the EXIM Bank list, which qualifies us automatically for developing projects that benefit from the bank’s credit line, both in Angola and in other Portuguese-language countries.”

COVEC, which is a Chinese state company and part of the group of the China Railway Engineering Corporation, has its core business focused on international projects, many of which are financed by China’s development support program.

“With the construction of the Luanda General Hospital, COVEC has proved it can successfully complete projects in Angola and other companies have not. As well as this we offer good prices, complete work quickly and within deadline and our work is of good quality,” Shi said.

Angola is China’s second largest trading partner in Africa. Chinese imports to Angola in 2005 totaled US$3.581 billion (an increase of 72.2 percent compared with 2004) and exports totaled US$196 million (90.2 percent more). (macauhub)