Repaving the ancient Silk Routes

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China’s Belt and Road (B&R) initiative is a global connectivity program focused on infrastructure development across East and Central Asia, the subcontinent, Africa and Europe. It goes beyond roads and ports, to include airports, power plants, pipelines, waste and water management facilities and telecommunications. These are supported by extensive ecosystems, providing opportunities for international professional and project management expertise.

Unprecedented scale

B&R projects are open to all countries beyond the 65 developing nations along the 6 economic corridors. It will have an impact on a population of about 4.4 billion and one third of the global economy.

 

Demand for global expertise

The size and complexity of B&R projects means that enterprises from both China and along the B&R will seek to partner with foreign companies which have globally recognized skills and capabilities, as well as experience in managing complex international engagements.

However, identifying the right B&R project and preparing for success raises a number of complex questions.

 

What are the risks associated with B&R projects?

Geopolitical risks

Changes in political regimes or in bilateral relations between countries involved in B&R during a project’s lifespan.

Funding risks

Funding gaps and host countries’ varied ability to repay loans, exacerbated by higher capital and debt service ratios of B&R projects.

Operational risks

A lack of experience in delivering and managing complex transnational projects, leading to delays and cost overruns.

 

How do I evaluate which B&R project to be involved in?

Commercial viability assessment

Conduct realistic economic modelling to establish the business case viability of a B&R project.

Review maturity of the infrastructure ecosystem

Assess the maturity and future plans of the surrounding infrastructure.

Establish a portfolio fit

Evaluate how the proposed B&R project complements the company's existing infrastructure portfolio and overall growth objectives.

 

Which factors will help me position for success?

Contingency strategies

Establish contingency plans to manage short term disruptions and plan for lengthy project lifespans.

Align with governments

Build strong and respected relationships with local authorities and align with national interests in order to effectively navigate political pressure points.

Establish trusted partnerships

Work with local companies with proven track records and established connections with key local stakeholders.

Adopt a risk-sharing approach

Establish trust among all stakeholders to dilute the burden of shouldering potential risks.

PwC's Growth Market Centre report 'Repaving the ancient Silk Routes', showcases the range of opportunities for foreign companies to get involved in China's Belt and Road initiative and how to best position themselves for success.

Contact us

Mark Rathbone

Asia-Pacific Capital Projects and Infrastructure Leader

Tel: +65 6236 4190

Neu Boon Ling

Growth Markets Centre, Capital Projects and Infrastructure, PwC

Tel: +65 6236 4029

Stella Lau

Growth Markets Centre (China), PwC

Tel: +65 6236 4235

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David Wijeratne

Growth Markets Centre Leader

Tel: +65 6236 5278

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