China continues to open up economy to overseas builders

China’s march towards an open, market-driven economy took another step forward last week when the Beijing Municipal Development and Reform Commission said it is about to open up the construction industry to overseas and privately-owned domestic companies.

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By  Eudore Chand Published  December 1, 2003

China’s march towards an open, market-driven economy took another step forward last week when the Beijing Municipal Development and Reform Commission said it is about to open up the construction industry to overseas and privately-owned domestic companies. Currently, construction projects are controlled by state-owned organisations. Even infrastructure project for utilities such as water, gas and heat, treatment of waste and public transportation could fall to the private sector. The move to invite non-governmental bidders for contracts is part of a streamlining process that the municipality hopes will save it billions of dollars as it improves infrastructure in the run-up to the 2008 Beijing Olympic games. For example, before 2008, when the city hosts the games, Beijing is expected to finish 10 subway lines at a cost of US $ 3.6 billion. “I believe that over US$10 billion can be saved by the local government,” said Ding Xiangyang, an official of Beijing Municipal Development and Reform Commission. According to the commission, build-operate-transfer (BOT) and transfer-operate-transfer (TOT) will be adopted. This will allow authorities to nationalise certain elements of the municipality’s infrastructure once the private sector has created them and recouped their investments.

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