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CSCEC inks $1.9b Bahamas deal
By Hou Qingyang (China Daily)
Updated: 2009-09-08 08:32
China State Construction Engineering Corp (CSCEC), the world's largest public construction contractor by market value, has inked a $1.9 billion construction deal with Bahamas-based Baha Mar Resorts Inc.
Under the terms of the deal CSCEC will be involved with a part of the 1,000-acre Baha Mar Resorts coming up in Nassau. The $3.6 billion resort is likely to be thrown open to the public in late 2013 and work will start in early 2010, CSCEC said in a statement.
The Chinese firm is also acquiring a 2.75 percent stake in the resort by investing $99 million.
Many of CSCEC's projects in the Middle East and Russia were hit by funding constraints last year due to the financial crisis. However, profits from overseas projects have improved in the first half of the year, as work on many of these suspended projects have begun again, said Sun Wenjie, chairman, CSCEC.
Sun said earlier that the company is determined to explore more overseas markets and it was in discussions for several big projects.
The company said it bagged $3.1 billion worth of new overseas construction projects in the first half of the year, accounting for 11 percent of the new contracts during the same period.
Overseas constructions projects normally have a higher profit margin than domestic projects but it also has accompanying risks like floating interest rates and political instabilities, said analysts.
"CSCEC's overseas business expansion actually conforms to market expectations," said Tian Donghong, analyst, CITIC China Securities Research.
The Bahamas contract was signed during China's top legislator Wu Bangguo's visit to the North American country recently.
The Export-Import Bank of China will finance the project. Financial details of the deal were not disclosed.
CSCEC has also won Wuhan-Huangshi and Wuhan-Xiaogan intercity railway construction tender projects in Hubei province with bidding prices of $524.2 million and $272.7 million respectively.
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