World Bank contracts 2017: Top Chinese contractors

As part of the World Bank 2017 contracts series, Devex has so far analyzed the key sectors and regions of major contract awardees, as well as the bank’s top 10 consultant contractors. In the third part of the series, we’ll explore the top Chinese contractors of fiscal year 2017. The World Bank started releasing its major contract awards data in 2014 and since then, China has been the leading country of origin for World Bank contractors, holding the highest total value of contracts at around $35 billion. Chinese contractors also rank third in terms of the number of contracts they received — around 6,500 — after contractors from Vietnam and India. China’s growing engagement with development has now hit the headlines after it set up a new national aid agency and began to emerge as a leading actor in humanitarian aid. Yet few understand Chinese development funding and how Chinese contractors are involved in doing business with traditional donors such as the World Bank. Devex has explored the World Bank’s contract awards data over the past five years to unveil the funding trends and sector priorities of its Chinese contractors. The World Bank distinguishes between four procurement categories: Civil works, consultant services, goods, and nonconsulting services, all of which will be included in this analysis. However, it is worth noting that Chinese contractors are most active in the civil works and goods categories. Shifting focus For the past decade, transportation has been the sector with the highest investments. However, in 2017, water and sanitation emerged as the top sector for Chinese contractors. From 2016, investment in this sector increased nearly tenfold, from approximately $265 million to $2.2 billion in 2017. A substantial part of this growth was due to hydropower project in Pakistan, whereby Chinese contractors were awarded contracts amounting to almost $2 billion, out of the $3.79 billion encompassing the whole project. The growth of the water and sanitation sector has also resulted in the expansion of the civil works procurement category, whose share of the total value for Chinese contractors was 82 percent in 2017. At the same time, the number of contracts for civil works has decreased among Chinese contractors. This seems to be a trend across all procurement categories, as the total number of contracts awarded to Chinese organizations went from 442 in 2012 down to 207 in 2017. The total value of contracts awarded to Chinese contractors, however, increased from $2.6 billion in 2012 to $4.3 billion in 2017. Going global? Although Pakistan was the number one country of investment for the World Bank in 2017 by contract value, China came in second place with around $600 million worth of contracts. However, the value of contracts implemented by Chinese contractors on Chinese soil has steadily decreased over the past five years. Instead, their local activity for the World Bank is slowly being replaced by work in Bangladesh, Ethiopia, Kenya, and Pakistan. The interest in African countries is likely to continue, as China has recently committed to further investments and collaboration at the Forum on China-Africa Cooperation. Looking at data for 2012-2017, fiscal year 2017 was the first year that the East Asia-Pacific region was not the leading recipient of World Bank contracts awarded to Chinese contractors. Who were the top Chinese contractors in 2017? In 2017, the World Bank hired 207 Chinese contractors for contracts worth a total of $4.3 billion. The list below considers only Chinese firms, rather than individual contractors, across all four procurement areas. A joint venture between a Chinese and foreign contractor has also been excluded. The top 10 Chinese contractors we have identified boast a total envelope of $2.3 billion in contracts for 2017, constituting 53 percent of the grand total for Chinese contractors overall. They were awarded 35 contracts, around 17 percent of the total. The ranking here is sorted by the total number of awarded contracts. In case of a tie, we looked at the total value of contracts. 1. China National Electric Import & Export Corporation Headquarters: Beijing, China Number of World Bank contracts in 2017: 8 Total value of contracts: $42,969,193 As one of the leading manufacturers and sellers of machinery and equipment for thermal and hydropower stations, power transmission, and transformation projects, CUEC won the highest number of contracts. Although only 3 of 8 contracts are based in China, together they are worth nearly $40 million, the remaining contracts are based in Uzbekistan. 2. China Henan International Cooperation Group Headquarters: Zhengzhou, Henan Number of World Bank contracts in 2017: 4 Total value of contracts: $76,794,043 All contracts are based in Africa, including Kenya, Burundi, and Mozambique in the sectors of transportation and water and sanitation. The group’s main services are engineering contracting, human resources, mining development, agriculture, and infrastructure. The group has vast experience in international projects, spanning over 30 countries in Asia and Africa. 3. Zhongmei Engineering Group Headquarters: Nanchang, Jiangxi Number of World Bank contracts in 2017: 4 Total value of contracts: $45,735,709 Established in 2001, Zhongmei Engineering Group offers a wide range of construction services, including engineering construction, energy engineering, and real estate development. Two of the four awarded contracts are based in Pakistan in water and sanitation worth around $20 million. The other two are in Zambia and Mozambique. 4. China Gezhouba Group Headquarters: Wuhan, Hubei Number of World Bank contracts in 2017: 3 Total value of contracts: $1,872,515,195 Although awarded only three contracts, they constitute a large share of the total contract value for 2017. All contracts are for the hydropower project in Pakistan. The group has a wide portfolio of construction specialties, mainly operating in areas of power plants, dams, roads, bridges, and other civil engineering projects. 5. Anhui Water Resources Development Headquarters: Bengbu, Anhui Number of World Bank contracts in 2017: 3 Total value of contracts: $24,018,084 Anhui Water Resources Development operates chiefly in China and focuses on construction projects, including buildings, roads, and municipal public works. For 2017, its three contracts were based in China, working on urban transportation, small towns’ water, and environmental management. 6. China Railway Construction Electrification Bureau Group Kang Yuan New Materials Headquarters: Wuhan, Hubei Number of World Bank contracts in 2017: 3 Total value of contracts: $14,240,782 The group operates primarily as a contractor for the design, construction, and maintenance management of railway electrification. The group’s subsidiary Kang Yuan New Materials provides goods for three contracts pertaining to railways in China. 7. Beijing IST Machinery Engineering & Technology Headquarters: Beijing Number of World Bank contracts in 2017: 3 Total value of contracts: $10,562,595 Operating in China only, this service provider has been awarded three contracts for goods in the sectors of transportation and energy. Projects are related to clean heating and urban transportation improvement. 8. Shandong Huimin Changqing Timber Headquarters: Huimin, Shandong Number of World Bank contracts in 2017: 3 Total value of contracts: $227,413 The only contractor in the top 10 list working in the sector of education, Shandong Huimin Changqing Timber has been awarded three contracts to provide goods for an education project in Kyrgyzstan. 9. China Railway No.5 Engineering Group Headquarters: Guiyang, Guizhou Number of World Bank contracts in 2017: 2 Total value of contracts: $142,207,073 As a subsidiary of China Railway Group, the China Railway No.5 Engineering Group provides heavy construction services, including constructing roads, highways, airports, and bridges. Outside Asia, the group mainly operates in Africa, where its two awarded contracts for 2017 are based. The contracts are for transportation projects in Eastern Africa. 10. Joint Venture China Civil Engineering Construction Corporation Headquarters: Beijing and Xi’an, Shaanxi Number of World Bank contracts in 2017: 2 Total value of contracts: $59,050,002 The only joint venture in the top 10 list between two Chinese companies includes China Civil Engineering Construction Corporation and Northwest Civil Airport Construction Group. Encompassing two contracts, the joint venture was initiated for an aviation project in Vanuatu, pertaining to rehabilitation of Port Vila’s Bauerfield Airport. Want to know more? Explore the data and analyze potential partners with Devex’s interactive visualization of the Chinese contractors to the World Bank.