WORLD NEWS
8
international
construction
september 2013
GLOBAL
Currency changes hit
construction costs
Hong Kong comes top as most expensive country
to build in, India is cheapest
C
urrency fluctuations were the dominant factor in driving relative
construction costs over the last 12 months, according to the findings
of a study of building costs in 47 countries by consultant EC Harris.
It found that the ten most expensive countries to build in are Hong Kong,
Switzerland, Denmark, Sweden, Macau, Australia, Japan, France, Singapore
and Belgium. In Hong Kong, the most expensive of all, construction costs
are 1.42 to 1.68 times what they are in the UK – the benchmark EC Harris
uses.
The cheapest countries are India, Indonesia, Vietnam, Morocco and
Malaysia. In India, the cheapest of all, costs are just 0.29 to 0.34 what they
are in the UK.
EC Harris said the fall of the Japanese Yen and Australian Dollar along
with the appreciation of the Chinese Yuan have had a significant impact on
costs.
Simon Rawlinson, head of strategic research and insight at EC Harris,
said, “The appreciation of the Chinese Yuan not only makes Chinese
imported materials to other countries more expensive, but has also
contributed to China moving nearly half way up the global (cost) rankings.”
On the other hand, the consultant said the fall in demand commodities
in many emerging markets had seen other costs drop, particularly those for
metallic building materials.
Mr Rawlinson added, “With new sources of supply coming on stream,
investment houses moving away from the commodity markets and a
substantial reduction in the growth rates of the BRICS it is not surprising
that prices have fallen in the short term.”
SAUDI ARABIA
The Arriyadh Development Authority has awarded three
contracts totalling US$ 22.5 billion for the construction of a 176 km, six-line
metro network in the Saudi Arabian capital, Riyadh. At US$ 9.5 billion, the
largest contract was awarded to the BACS consortium led by US contractor
Bechtel to design and build lines one and two, covering 63.3 km. Spain’s FCC
leads the FAST consortium which was awarded a US$ 7.8 billion contract to
deliver lines four, five and six – covering 72.5 km. A further US$ 5.2 billion
contract was awarded to the Arriyadh New Mobility consortium, which
consists of Salini Impregilo, Ansaldo, Bombardier, Larsen & Toubro and
Nesma. These companies will build the longest line of the new underground
network, the 40.7 km line three. The network will feature 85 stations, and
operate with driverless electric trains. Construction is scheduled to begin in
the first quarter of 2014.
CHINA
Suspended
sentence
Liu Zhijun, China’s Minister for
Railways from 2003 to 2011,
has been given a death sentence
suspended for two-years for bribery
and abuse of power in connection
with construction of the country’s
high-speed rail network.
The Beijing court also “Deprived
his political right for life and
confiscated all his personal
property”, according to state media
reports. Suspended death sentences
in China that include a two-year
reprieve are usually commuted
to life imprisonment. The court’s
verdict is likely to require Mr Liu to
spend at least ten years in jail.
The sentence follows Mr Liu’s
guilty plea to accepting bribes.
Mr Liu admitted to accepting
bribes including CNY 64.6
million (US$ 10.5 million) in
cash and CNY 800 million (US$
130 million) in property between
1986 and 2011 in exchange for
construction contracts.
US
Record
pipeline
Technip has won a contract from
Shell to lay the world’s deepest gas
pipeline in the US Gulf of Mexico.
The pipeline is part of the sub-sea
infrastructure for the Stones field in
the Walker Ridge area of the Gulf,
where the water is some 2,900 m
deep.
Technip will be in charge of
installation of the subsea gas
production system and gas pipeline,
including
associated
project
management, engineering and stalk
fabrication. The scheme will be
overseen from Technip’s operating
centre in Houston, Texas, US,
with fabrication taking place it its
facility in Mobile, Alabama, US.
The offshore installation is expected
to be performed in the second half
of 2014 by the Deep Blue, Technip’s
deepwater pipelay vessel.
David Dickson, Technip’s senior
vice president for the North
America region, said, “With greater
depths come greater challenges for
our clients and we are delighted
to help Shell push back subsea
frontiers by laying the deepest gas
pipeline worldwide. With the award
of this high-profile project, Technip
confirms its subsea leadership and
keeps differentiating itself through
innovation to remain at the
forefront of frontier projects.”
US
Exports fall
US exports of construction
equipment were down -21% in
the first half of the year, according
to data from the Association of
Equipment Manufacturers (AEM).
The value of machines shipped
stood at US$ 10.8 billion to the
end of June, compared to US$ 13.7
billion for the first six months of
2012.
Exports to Central America saw a
+15% increase, but sales to Europe
were down -20% to US$ 1.4 billion,
Asia was down -24% to US$ 1.2
billion, South America dropped
-13% to US$ 1.9 billion, Africa
fell -20% to US$ 654 million and
Australia & Oceania plummeted
-62% to US$ 750 million.
RUSSIA
World cup
spend
Some RUR 664 billion (US$ 20
billion) is expected to be spent in
Russia over the next five years in
preparation for the 2018 FIFA
football World Cup. This money
will come from federal and regional
funds as well as through private
investors, according to a report
from research company PMR.
It said it would be a huge challenge
for Russia to develop the nine
stadiums for the tournament ahead
of the deadline at the end of 2017.
The total spend excludes
infrastructure schemes being built
ahead of the tournament, which
come under a different programme
– Development of Russia’s Transport
System 2010 to 2020.
By the time of the tournament,
the motorway connecting Moscow
and St Petersburg will have to have
been constructed, and the Don,
Ukraine, Ural, Kaspiy, Volga and
Russia federal highways will need to
have been modernised.
