How Regional Players Plan to Leverage BRI Business Opportunities · 2019-08-29 · Preface 31 Delving into the BRI: How Regional Players Plan to Leverage on BRI Business Opportunities

Delving into the BRI: How Regional Players Plan to Leverage BRI Business Opportunities

What

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What

’s new

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Contents

Preface 1

Survey Results 3

Background: Regional collaboration 5

Understanding the regional infrastructure market 7

Infrastructure opportunities in the region 10

Primary forms of engagement with BRI projects 12

Bilateral or multilateral partnerships in expected opportunities 14

Types of procurement of expected opportunities 17

Types of risks of expected opportunities 18

Planned risk mitigation for expected opportunities 19

Planned internal capacity-building for expected opportunities 20

Conclusion 23

Preface1

Preface 31

Delving into the BRI: How Regional Players Plan to Leverage on BRI Business Opportunities 1

This report, “Delving into the BRI: How Regional Players Plan to Leverage BRI Business Opportunities” is jointly produced by the Singapore Business Federation (SBF) and PwC Singapore (together referred as “we”). It is published in conjunction with the Singapore Regional Business Forum and Singapore Regional Infrastructure Summit held on 15 and 16 August 2019 respectively. Both events are organised by the SBF, with PwC Singapore as the Knowledge Partner.

In June and July 2019, we conducted an invitation-only online survey whereby senior representatives from organisations across a broad range of sectors and geographical locations were asked about their interest, level of involvement and plans with regards to business opportunities arising from the Belt and Road Initiative (BRI) in the Association of South-East Asian Nation (ASEAN) and South Asia region. Based on the survey, this report provides a high-level description of the regional infrastructure landscape and BRI-related developments, as well as an analysis and key highlights of the survey’s results.

Please note that the numbers in the tables and charts may not sum up to stated total or 100% due to roundings.

August 2019

Survey Results2

Survey Results 32

Delving into the BRI: How Regional Players Plan to Leverage BRI Business Opportunities 3

The analysis and findings in this report are based on the results of the survey conducted in June and July 2019. The respondents of the survey include both public and private sector companies involved in regional infrastructure. These include multinational organisations, professional services firms and financial institutions (Figure 1).

Close to 50 senior representatives from organisations in various industries ranging from financial and professional services, oil and gas to manufacturing and construction across the region participated in the survey.

Figure 1: Respondents' sector(s)*

Question: My organisation is primarily in the following sector

Financial services

Professional services

Construction and materials

Oil and gas

Alternative energy

Consumer goods

Industrial good and services

Technology

Utilities

Healthcare and phamaceuticals

Metals and mining

Telecommunications

Other

26%17%8%6%4%4%4%4%4%2%2%2%

19%

*Chemicals, Consumer services, Government were included in the survey options but were not selected by any respondents.

Survey Results32

4 Delving into the BRI: How Regional Players Plan to Leverage BRI Business Opportunities

Figure 2 shows that the majority of respondents have their headquarters in Singapore (50%), followed by the European Union (12%) and China (10%). Note that some respondents have multiple headquarters in different countries. Further, there is a good range of survey respondents by revenue size; approximately 25% have annual global revenues of less than USD 50 million, while nearly 30% of respondents have annual global revenues of USD 1 billion or more (Figure 3).

*Brunei, Cambodia, Indonesia, Laos, Thailand, Vietnam, rest of Asia, Africa and the Middle East were included in the survey options but were not selected by any respondents.

Figure 3: Respondents' global revenue for the latest financial year

Question: My organisation’s global revenue for the latest full financial year was

USD 10bn or more

USD 5bn to USD 10bn

USD 1bn to USD 5bn

USD 500m to USD 1bn

USD 100m to USD 500m

USD 50m to USD 100m

Less than USD 50m

N.A.

14%

5%

11%

9%

11%

14%

25%

11%

Figure 2: Location(s) of respondents' global HQ(s)*

Question: My organisation’s global HQ(s) is/are located in

The survey aims to understand how organisations have participated in the Belt & Road Initiative (“BRI”) since its launch six years ago in 2013 by Chinese President Xi Jinping.

50%

12%

10%

4%

4%

4%

4%

Singapore

Europe

China

Hong Kong,SAR

Japan

Malaysia

North America

2%South America

2%

2%

2%

2%

Myanmar

Philippines

South Korea

Australia

2%Other

Survey Results 32


China - Central Asia - Russia - Europe

China - Central Asia - Middle East

China - Southeast Asia - South Asia - Indian Ocean

China - South China Sea - Indian Ocean - Europe

China Coastal Ports - South China Sea - South Pacific Ocean

New Eurasian Land Bridge

China - Mongolia - Russia Coridor

China - Pakistan Corridor

Bangladesh - China - India - Myanmar Corridor

China - Central Asia - West Asia Corridor

China - Indochina Peninsula Corridor

Europe

Mediterranean Sea

Central and Western Asia

Indian Ocean

South Asia

Southeast Asia

China

Background: Regional Collaboration

The BRI1 was first proposed by Chinese President Xi Jinping in 2013, with the aim of creating a transport network that connects Asia, Europe and Africa – recreating the ancient Silk Routes (Figure 4). The network links 65 countries, equating to 65% of the world population, contributing one-third of the world’s GDP and 40% of global trade. The BRI serves as a blueprint for how China wants to further connect itself with the global economy and strengthen its influence in the region.

Figure 4: The BRI covers three key land routes and two main ocean routes

1 Repaving the ancient Silk Routes, PwC, 2017 2 Economist Corporate Network, “Up and Running? Opportunity and Risk along China’s Belt and Road Initiative,” 2017.3 Asian Infrastructure Investment Bank website, https://www.aiib.org/en/about-aiib/governance/members-of-bank/index.html, accessed July 16, 2019. 4 Belt and Road Portal, list of countries which have signed Belt and Road Initiative cooperation agreements with the Chinese government (Chinese language), 12 April 2019, https://www.yidaiyilu.gov.cn/info/iList.jsp?tm_id=126&cat_id=10122&info_id=77298, accessed 24 April 2019.

Source: Map from ‘Vision and actions on jointly building the Silk Road Economic Belt and 21st Century Maritime Silk Road’ document (March 28, 2015). Actual routes may differ and may also extend to encompass other territories as the project develops; Repaving the ancient Silk Routes, PwC, 2017

Soon after the BRI was launched, the Chinese government established and led the formation of several financing vehicles to support the initiative and wider infrastructure development in developing nations, namely the Asian Infrastructure Investment Bank (AIIB) and the SRF (Silk Road Fund). When the AIIB was established in October 2014, the UK, France, Germany, Italy and 21 other countries pledged support for the bank2. As of July 16, 2019, the bank has 97 approved members3.

By 2017, China has invested more than USD 210 billion, and Chinese companies have secured more than USD 340 billion in construction contracts in BRI projects (Figure 5), mainly in Asia. It is reported that to date, the Chinese government has signed cooperation agreements with 126 countries and 29 international organisations in the six years since its establishment4.

Survey Results32


With more BRI projects, we expect more organisations in the region to seize the opportunity and participate in the projects in the future. In the early days of BRI, there was a constant quest by international investors to define what BRI projects are. While the Chinese government has explained on multiple occasions that BRI is a concept, framework and principle, rather than a defined list of projects, international investors are still hoping for more details around the definition of BRI projects. Broadly speaking BRI projects are projects that fall within the several BRI economic corridors and trade routes, and their numbers will grow as more countries join the BRI.

32% of the respondents are currently involved in a BRI-related project while 25% of respondents stated they are still unclear about the opportunities at the moment (Figure 6). The respondents of the current survey are largely headquartered in Singapore and have perhaps been using Singapore as a base for BRI activities.

Figure 5: Total Chinese investment in BRI projects, in total contracts awarded to Chinese companies

Source: American Enterprise Institute. Values shown in the cumulative.

$400 bn

300

200

100

2010 2011 2012 2013 2014 2015 2016 2017

total of contracts awarded to Chinese companies

total invested by China

5 The Guardian, “What is China’s Belt and Road Initiative?” https://www.theguardian.com/cities/ng-interactive/2018/jul/30/what-china-belt- road-initiative-silk-road-explainer, accessed July 16, 2019.

Survey Results 32


Figure 6: Survey respondents’ current level of involvement in BRI projects

Question: My organisation’s status of involvement in the BRI

currently involved in a BRI-related project(s)

at the preliminary information gathering and analysis stage

unclear about BRI opportunities at the moment

not currently involved, but expects to be involved within the next 2 years

established a dedicated BRI unit to assess commercial viability

previously considered involvement, but decided not to do so at present

32%

30%

25%

5%9%

Understanding the regional infrastructure market

The Asian Development Bank (ADB) estimated that Developing Asia6 as a whole including most of ASEAN and South Asia will need to invest USD 26 trillion over the 15-year period from 2016 to 2030, or USD 1.7 trillion per year, on infrastructure to maintain current growth rates, including the cost of climate mitigation and adaptation7,8.The total infrastructure investment needs in ASEAN from 2016 to 2030, according to the same report, will be USD 2.8 trillion (baseline estimate) and USD 3.1 trillion (climate-adjusted estimate). For South Asia, the baseline estimate was USD 5.5 trillion and USD 6.3 trillion after climate-adjustment. This works out to an annual investment (based on baseline estimates) need of USD 184 billion and USD 365 billion for ASEAN and South Asia respectively.

ASEAN is developing at a rapid rate, with a combined Gross Domestic Product (GDP) of USD 2.6 trillion in 2016 and an annual growth forecast of 5%. ASEAN is currently the sixth-largest economy in the world, and is projected to become the fourth-largest by 2030.9

6 Developing Asia refers to the 45 Developing Member Countries (DMCs) in the 2017 report by the Asian Development Bank, Meeting Asia’s Infrastructure Needs7 Asian Development Bank, Meeting Asia’s Infrastructure Needs, February 20178 These estimates include climate mitigation and adaptation costs. The second set of estimates does not include climate-adjusted costs (baseline estimate), and amounts to USD 22.6 trillion, or USD 1.5 trillion per year. 9 Speech by Minister Chan Chun Sing at the 11th Singapore Economic Policy Forum, 25 October 2018, https://www.mti.gov.sg/Newsroom/Speeches/2018/10/ Speech-by-Minister-Chan-Chun-Sing-at-the-11th-Singapore-Economic-Policy-Forum, accessed August 12, 2019

Survey Results32


Vietnam

Singapore

Indonesia

Myanmar

Malaysia

Thailand

Cambodia

Philippines

Bangladesh

Sri Lanka

Laos

Pakistan

Brunei

Other

66%

57%

57%

50%

50%

48%

41%

36%

30%

30%

30%

18%

7%

11%

Figure 7: ASEAN and South Asian countries where respondents see BRI opportunities

10 A revival of Southeast Asian manufacturing hubs, JLL, April 2017

A large part of the economic growth in ASEAN is attributable to the rise of the manufacturing industry10, among other factors. Manufacturers are shifting operations from China to Southeast Asia due to lower overall costs, China’s domestic industry re-structuring initiative, rises in domestic consumption and improving physical infrastructure, and more recently due to the China-US trade tensions. These fueled demand for infrastructure development. Infrastructure investment is a key economic growth driver and an enabler of economic progress.

With regards to countries for investment, the level of interest shown by the respondents in our survey is relatively well-distributed across countries, with the exception of Brunei and Pakistan where respondents have shown a lower level of interest. As shown in Figure 7, respondents displayed a high level of interest to invest in ASEAN, in particular, one or more of these countries: Vietnam (66%), followed by Singapore (57%), Indonesia (57%), Myanmar (50%), Malaysia (50%) and Thailand (48%).

Question: My organisation primarily sees BRI opportunities in the said countries in ASEAN and South Asia (showing only those who selected country)

Survey Results 32


The respondents are also more interested to participate in economic infrastructure development which will support trade and industrialisation. At least a quarter of respondents have stated that they see BRI opportunities in each of the sectors listed, such as ports, roads, rails, ICT/Telecommunications, smart cities/urban development and industrial estates and SEZs (Special Economic Zones) (Figure 8). These sectors are critical for creating an ecosystem which supports logistics and trade activities along BRI countries, and the movement of goods and services across the region.

When asked to pick sectors where they saw BRI opportunities, the highest proportion of respondents (43%) chose smart cities/urban development, followed by industrial estates and SEZs (41%), ICT (information and communications technology), roads and ports (39% each). Rail (36%) and water/wastewater (34%) are also seen as high-priority sectors for BRI opportunities.

Among energy projects, investors are keen on both renewable and non-renewable projects. About one quarter of respondents picked one or both these categories. Within renewable energy, solar (92%) and wind (75%) projects came up top.

Figure 8: Infrastructure sectors where survey respondents see BRI opportunities

Question: My organisation primarily sees BRI opportunities in the said infrastructure sectors (showing only ‘see BRI opportunities’)

Smart cities / urban development

Industrial estates and SEZs (Special Economic Zones)

Roads

Ports

ICT / Telecommunications

Rail

Water / Wastewater treatment

Power generation - renewable energy

Airport

Social infrastructure (hospitals, prisons, civic buildings etc.)

Power transmisssion and distribution

Power generation - non-renewable energy

Other

43%

41%

39%

39%

39%

36%

34%

27%

27%

25%

25%

23%

20%

Survey Results32


Infrastructure opportunities in the region

Given the gap in infrastructure development, there are opportunities in ASEAN for investors and market participants to take part in projects in various sectors. Some of these opportunities are highlighted in the map below Figure 9.

Figure 9: Examples of current or pipeline projects in the region, by country

Source: PwC, “Seizing greenfield infrastructure opportunities in ASEAN: Infrastructure Series Report 2,” 2017, https://www.pwc.com/sg/en/publications/assets/cpi-report-2-seizing-greenfield.pdf

In our survey, we asked respondents about the financial scale per BRI project which their organisations expect to be involved in, as well as the financial scale per BRI project their respective organisations have been involved in the last 5 years. 41% of respondents stated that they will be involved in BRI projects of at least USD 100 million each, compared to 21% who were involved in such projects in the past 5 years (Figure 10). We also note that 14% of respondents indicated that they expect to be involved in projects between USD 500 million and USD 2 billion, compared to none indicating their involvement in this range for the past 5 years. The results show that more organisations are increasingly willing to participate in larger scale investments in BRI projects.

About one third of the respondents did not select any option indicating the expected financial scale per BRI project. This could be attributed to a lack of a concrete business plan for BRI projects or that these companies are providing services instead of direct investments.

Myanmar:1. Yangon-Mandalay Expressway

Upgrade Project

2. Yangon-Mandalay Rail Line Upgrade

3. Thanlyin gas-fired power generation facility

Thailand:1. Bang Yai (Nonthaburi)

- Kanchanaburi Motorway Project

2. Chiang Khong (Chiang Rai) - Ban Phachi (Ayutthaya) High Speed Rail Line

3. Gulf Energy natural gas power plant, Hemaraj Industrial Estate

Malaysia:1. Pan-Borneo Highway - Phase II

2. Taman Beringin waste-to-energy incinerator project

3. New East Coast Railway, Kuala Lumpur - Tumpat (Kelantan)

Vietnam:1. Ha Tinh Province Solar Power Plant

2. Ha Noi (City) Ring Road No. 5 Project

3. Thanh pho Ho Chi Minh (City) Metro Line

Lao PDR:1. Vientiane - Pakse (Champassak) Highway

2. Trans-Asian Railway Line, Kunming (Yunnan, China) - Vientiane (Lao PDR)

3. Luang Prabang Hydropower Project

Cambodia:1. Phnom Penh-Sihanoukville

High-Speed Expressway

2. International Airport - Special Economic Zone Rail Link, Phnom Penh

3. Sambor Dam Project

Singapore:1. North-South Expressway, East Coast

Parkway - Admiralty Road West

2. Circle MRT Line Stage VI

3. Integrated biomass-solar power generation plant

Indonesia:1. Baturaden Geothermal Power Plant

2. Jakarta Mass Rapid Transit System, North-South Line - Phase 2

3. Patimban Deep-Sea Port Project (Cilamaya)

Philippines:1. Davao Sasa Port Modernisation

2. Manila Bay International Airport

3. Subic coal-fired power plant expansion

Survey Results 32


Figure 10: Financial scale per BRI project respondents expect to be involved in

Majority of the respondents stated that they will be involved with BRI projects in the very near future, with 45% stating that they will be involved in the next three years (Figure 11). Results indicate that the majority of the respondents are already involved in BRI projects or are already formulating strategies to get involved.

Question: The financial scale per BRI project my organisation expects to be involved in is

USD 5bn or more

USD 2bn to USD 5bn

USD 1bn to USD 2bn

USD 500m to USD 1bn

USD 100m to USD 500m

Less than USD 100m

N.A.

5%

5%

9%

27%

16%

25%

23%

34%

57%

0%

0%

0%

0%

0%

Expected financial scale per BRI project

Total financial scale per BRI project in the last 5 years

Survey Results32


Primary forms of engagement with BRI projects

There are multiple ways which market participants can be involved in BRI projects depending on their business nature and more importantly, their risk appetite. 34% of the respondents stated that they would like to be engaged as financial investors in BRI projects, followed by 30% in operations & maintenance (Figure 12). On the other hand, only 18% of the respondents are likely to engage as a primary sponsor of infrastructure projects as both financiers and operators. This shows a desire for risk sharing among industry players.

Figure 12: Primary forms of engagement with BRI projects

Question: How is your organisation engaging in, or how would your organisation engage in a BRI project?

Financial investor

Operations and Maintenance (O&M)

Technology transfer

Engineering Procurement Construction (EPC)

Strategic investor providing both funding and know-how

Official Development Assistance (ODA)/ Other official flows

Other

34%

30%

25%

23%

18%

16%

30%

Figure 11: Timeline of respondents’ involvement with BRI projects

Question: When will my organisation expect to be involved in a BRI project

In the next 3 years

45%3 years later and beyond

23%This year

32%

Survey Results 32


Figure 13: The type of BRI projects respondents are currently involved in or envisage to be involved in

Further, 52% of respondents stated that they would like to be involved in both greenfield and brownfield BRI projects (Figure 13). Greenfield projects have a longer gestation period and carry significantly higher development risks compared to brownfield projects. It is likely that respondents want to manage their exposure by having a balanced pipeline of greenfield and brownfield projects.

Question: What type of BRI project is your organisation currently involved in or envisage to be involved in?

Brownfield

5%Both

52%N.A

30%Greenfield

14%

Survey Results32


Figure 14: Perceived opportunities for partnership

Bilateral or multilateral partnerships in expected opportunities

Successful infrastructure development requires strong partnerships among stakeholders, including local governments, international or multilateral organisations, and/or other private-sector players. When asked to choose one or more partners, 75% stated that they see opportunities in partnering with BRI country governments in ASEAN and South Asia, followed by 45% with multilateral organisations and 32% with third-country governments (Figure 14). It is clear that respondents recognised the importance of partnership with local government.

Question: My organisation sees opportunities in partnership with the project owners and government in the following BRI countries (showing only those who identified party as partner)

75%

45%

32%

14%

BRI country governments in ASEAN and South Asia

Third-country governments

Multilateral organisations

N.A.

Survey Results 32


Figure 15: Preferred BRI country government partners

Question: Please elaborate if you selected “BRI country governments in ASEAN and South Asia” in the previous question

Singapore

Indonesia

Thailand

Vietnam

Myanmar

Cambodia

Philippines

India

Laos

Sri Lanka

Pakistan

Malaysia

Brunei

Other

64%

64%

64%

64%

55%

42%

39%

30%

27%

27%

24%

12%

9%

6%

Among those who picked partnering with country governments in ASEAN and South Asia in BRI projects, more than half of the respondents picked one of these countries, Indonesia, Myanmar, Singapore, Thailand and Vietnam as their preferred country government partner (Figure 15). This is not surprising given that these were also the respondents’ preferred countries for investment. Respondents recognise that collaborating with governments in the region is key for the successful implementation of BRI projects.

Survey Results32


Figure 17: Preferred multilateral organisation partnersFigure 16: Preferred third-country government partners

Question: Please elaborate if you selected “Third-country governments” in the previous question

Question: Please elaborate if you selected “Multilateral organisations” in the previous question

China Asian Infrastructure Investment Bank

Japan Asian Development Bank

United States World Bank

86% 80%

50% 65%

43% 60%

United Kingdom Other

Germany

South Korea

Other

36% 5%

29%

29%

7%

For those who selected partnering with third-country governments, Figure 16 shows that a majority (86%) indicated China as one of their preferred partners, followed by Japan (50%).

In addition, we observe that nearly half of the respondents who chose China and/or Japan, have at the same time indicated that they would also partner with US, UK and/or Germany. Therefore, the data suggests that market participants hope to see more involvement from the western countries in BRI projects. This could be driven by the desire to diversify and bring in different sources of technology and know-how.

With regards to the respondents who picked multilateral organisations as their partner, a majority (80%) showed that they prefer the AIIB, followed by the ADB (65%) and the World Bank (60%).

Survey Results 32


Types of procurement of expected opportunities

Infrastructure projects can be procured through a wide spectrum of commercial arrangements. The risk allocation between the public and private sectors differs within this spectrum of commercial arrangements. We asked the respondents what type(s) of BRI project procurement they would like to pursue or be involved in. Close to half of the respondents are interested to participate in owning and operating these assets under one or more of these models including DBFOM, DBFM, DBFO, BOT, BOOT, BTO, ROT and concession models (Figure 18).

Figure 18: Types of BRI project procurement that the respondents would like to pursue or be involved in

Question: My organisation intends to pursue or be involved in the following types of procurement for BRI projects (showing only those who intend to pursue)

52%

48%

20%

20%

BOT+ (Build, Operate, Transfer)

-type

Others (Lease, affermage etc.)

DBFO^

(Design, Build, Finance and Operate)-type

N.A.

+ BOT (Build, Operate, Transfer), BOOT (Build, Own, Operate, Transfer), BTO (Build, Transfer, Operate), ROT (Rehabilitate, Operate, Transfer) and Concession (of public works)

^ DBFOM (Design, Build, Finance, Operate and Maintain), DBFM (Design, Build, Finance and Maintain), DBFO (Design, Build, Finance and Operate) and PFI (Private Finance Initiative)

Survey Results32


Types of risks of expected opportunities

All infrastructure project developments have inherent risks and to successfully implement these projects, the risk allocation among public and private stakeholders must be carefully balanced. The recent political changes in the region have seen several interruptions in many infrastructure projects (for example, the East Coast Rail Link mega project (ECRL) in Malaysia was put on hold following the country’s 2018 general election, and was recently resumed since April 2019) and such political risks are still fresh in respondents’ minds. Indeed, when asked about top risks they associated with BRI projects, 75% of respondents cited political risk, followed by 68% for financial risk and 64% for governance as key risks in BRI projects (Figure 19).

Figure 19: Risks in BRI project involvement as identified by respondents

Question: What risks have your organisation identified in regard to getting involved with BRI projects?

Governance 64%

48%

75%

43%

68%

45%

Transparency

Political Risk

Operational Risk

Financial Risk

Working with foreign entities

Survey Results 32


Planned risk mitigation for expected opportunities

To manage risk, respondents have indicated that a multifaceted approach is required. A majority of our respondents have chosen more than one mitigation method. Respondents are of the view that greater governance, transparency, collaboration and risk-sharing are all important elements of risk mitigation (Figure 20).

Figure 20: Mitigation measures of identified risks in BRI projects as selected by respondents

Question: How would your organisation mitigate the identified risks in BRI projects? (showing only those who selected mitigation measure)

55%

50%

50%

48%

48%

41%

5%

Engage external parties (such as other private sector players,

third-country governments, international organisations, development finance

institutions, amongst others in BRI projects)

Demand greater transparency in BRI projects (such as requesting that major documents

like agreements and impact assessment studies be published)

Strengthen internal governance frameworks (such as improving SOPs, reporting and monitoring of governance, internal audit

procedures)

Establish greater scrutiny and higher standards for financial monitoring and

due diligence of BRI projects

Structure PPPs or similar schemes where multiple stakeholders and independent parties as well as a diversity of project

finance options are embedded

Increase level of regulatory compliance (such as strengthening KYC

(Know Your Client) procedure)

Other

Survey Results32


Planned internal capacity-building for expected opportunities

How are respondents responding to challenges and the opportunities of the BRI? Figure 21 shows that 61% indicated that they would like to build up their human resource capabilities, and 59% stated that they would like to search for joint venture partners. Only 20% indicated that they would like to establish new representative offices. Most respondents indicated that they would like to act “this year” as compared to “in the next three years”.

Figure 21: Respondents’ preparation plans for leveraging on the BRI opportunities

Question: My organisation has plans to do the following in order to respond to BRI opportunities

Build up our human capabilities

Search for joint venture partners

Establish new representative offices

This year 41%

This year 35%

This year 22%

In the next 3 years 59%



61%

59%

20%

Survey Results 32


Conclusion3

Conclusion 33

China’s BRI activities have received its fair share of praise and concern. However, its impact on the regional infrastructure development will be significant. Our survey showed that business leaders are more aware of BRI opportunities, and as a result, they are more willing to explore getting involved with BRI projects. Many of the respondents are in fact, currently involved in BRI projects.

In terms of project locations, the interest expressed is broad-based with a preference for countries like Singapore, Thailand, Vietnam, Myanmar and Malaysia. There is also a wide distribution of interest in various sectors such as transport, smart cities/built environment, industrial zone developments, energy and water.

Whereas a significant number of respondents are keen to participate in financing and/or operating these assets, they are still cautious about investing in large-scale projects. Respondents have indicated political, financial and governance risks as key risks they are concerned about. Market participants are undertaking a holistic approach to risk management and mitigation.

With strong reputation and deep business expertise, Singapore is a hub for talent recruitment and the provisionof professional and financial services. At the same time, Singapore companies can form regional partnerships inBRI projects to share in the risk and rewards of these projects. As Singapore thrives as a knowledge-based economy, the city state continues to play a strategic role in project implementations in the region.


© 2019 PricewaterhouseCoopers LLP. All rights reserved. “PricewaterhouseCoopers” and “PwC” refer to the network of member firms of PricewaterhouseCoopers International Limited (PwCIL), or, as the context requires, individual member firms of the PwC network.Each member firm is a separate legal entity and does not act as an agent of PwCIL or any other member firm.

Jennifer Tay

PartnerCapital Projects & InfrastructurePwC [email protected]

Mark Rathbone

PartnerAsia Pacific Capital Projects & Infrastructure LeaderPwC [email protected]

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How Regional Players Plan to Leverage BRI Business Opportunities · 2019-08-29 · Preface 31 Delving into the BRI: How Regional Players Plan to Leverage on BRI Business Opportunities