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.
Demand for global expertise
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. 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.