China Harbour Engineering Company Ltd (CHEC) has been named as preferred bidder for the £300M contract to provide marine works for the Swansea Bay Tidal Lagoon – the world’s first tidal lagoon power plant.

The delivery of the £1 billion Swansea Bay Tidal Lagoon will kick-start a programme of Chinese investment into UK infrastructure and the pursuit of a tidal lagoon development programme that could see British expertise and technology exported to Asia. 

Tidal Lagoon Swansea Bay Plc has named CHEC Ltd, one of the world’s largest specialist marine engineering contractors and investors, as its preferred bidder for a marine works package that will include the construction of the six mile lagoon wall in Swansea Bay. 

Following advanced works, a fixed price contract with a risk and value engineering scheme for the main marine work at Swansea Bay will be signed later this year. Approximately half of the contract value will be spent on a British workforce, local partners and a local supply chain.  Under the terms of the contract, CHEC will be responsible for the construction of the bund wall and coffer dam, sourcing and transporting rock armour and materials to Swansea Bay, and managing all landside and marine crews associated with this element of the build.  At peak construction, it will manage 500 workers on site at Swansea Bay.

As well as committing to approximately 50% UK content for the delivery of the package, CHEC has also established a UK subsidiary company and has set out its vision to pursue a UK infrastructure investment programme over the next decade.  CHEC’s investment strategy will include a focus on further tidal lagoon infrastructure projects in the UK.

Further to the work programme on the Swansea Bay Tidal Lagoon, CHEC will sign a Memorandum of Understanding with Tidal Lagoon Power Ltd, the project’s developers, for the development of tidal lagoons in Asia, particularly at sites along China’s 18,000 km of coastline, potentially opening a major new export channel for British expertise and technology.

CHEC - strategic decision to enter UK infrastructure and investment market

Mr LIN Yi Chong, President & CEO at China Harbour Engineering Company, said:

“CHEC has taken the strategic decision to enter the UK infrastructure investment and construction market, and we see the Swansea Bay Tidal Lagoon, a pioneering scheme that could bring the world a new energy option, as the cornerstone project in our business development strategy in the UK and wider Europe. We have not invested directly into the Swansea Bay project but we made a proposal to do so and will seek opportunities to invest in similar projects in the UK and Europe.  We will seek to grow our UK presence through significant investment into a subsidiary business and through a programme of UK infrastructure investment and construction.”

“As a state owned enterprise, we are working closely on the ‘Green China’ initiative with the central government and local authorities in China.  We have invited TLP to work with us on the development of tidal lagoons in China and across Asia, and a Memorandum of Understanding will be signed shortly.”

A leading player in the global maritime engineering sector, CHEC has over 10,000 employees, currently working on contracts with a total value of more than US$10 billion.  CHEC is a subsidiary of China Communication Construction Company Ltd, one of the Global Fortune 500 companies.  With increasing overseas investment in infrastructure as part of CHEC’s global business development strategy, CHEC has more than 70 overseas offices, including the newly-established UK office, with business in over 80 countries around the world.

Opportunity for exporting British tidal expertise to Asia is considerable

Richard Graham, Member of Parliament for Gloucester, commented:

"China Harbour Engineering's commitment to invest in the world's first tidal lagoon power plant at Swansea Bay, with 50% of the contract value going to British sub-contractors and supply chain, reinforces Britain's position as Europe's leading beneficiary of Chinese inward investment. The opportunity for later exporting British tidal expertise to Asia with CHEC is considerable and highlights the benefits of positive business engagement with China.

Mark Shorrock, chief executive of Tidal Lagoon Power, said:

“I have worked in China, speak Chinese and have huge esteem for China's delivery capability and ability to deliver projects to time and budget.  Having encouraged CHEC to bid this job and invest in Western European infrastructure projects by creating a British base, I was delighted, following an intensive competition, when my engineering colleagues recommended CHEC for our seminal Swansea Bay project.”

“Further, I think China is taking a leadership position in tackling the threat of climate change and so a state owned enterprise makes a good partner when you wish to deploy multiple tidal lagoons quickly and cost effectively.  Beginning in Swansea Bay, we aim to foster a new economic opportunity for collaboration in civil engineering between our two companies and nations. Given the lead by our respective governments, we are aiming to take on the greening of our energy economy in European and Asian locations that have eight or more metres of tidal range and are interested in low impact, secure and local sources of energy.”

The project’s major delivery partnerships announced to date are: Atkins as Client’s Engineer; General Electric and Andritz Hydro as Turbine Preferred Bidders; Laing O’Rourke as Turbine Housing Preferred Bidder; Alun Griffiths Ltd as Public Realm Ancillary Works Preferred Bidder; China Harbour Engineering Company as Marine Works Preferred Bidder; and Prudential and InfraRed Capital Partners as Equity Partners.

CHEC has selected Newport’s environmental consultancy JBA and Surrey engineering consultancy Cullen Grummitt & Roe to provide support through the advanced works and value engineering phase for the Swansea Bay Tidal Lagoon project.  CHEC has also appointed H R Wallingford to undertake 2D and 3D hydraulic models and will select more UK consultants and local resources to provide technical supports to the design and construction phases in due course.

Tidal Lagoon Swansea Bay Plc will run further tenders through the summer for the construction of a Turbine Assembly Plant in Wales, and for the lagoon’s public realm and buildings work.

ICE: Chinese companies' UK involvement expected to grow

Douglas E Oakervee CBE FREng FICE, The Institution of Civil Engineers’ Special Representative for China described the selection of CHEC as preferred bidder as a major step in the collaboration between UK and Chinese companies. With sovereign and private investment from China increasing to fund much of the UK’s infrastructure and energy needs,  the involvement of Chinese companies is expected to grow.

The Institution of Civil Engineers is about to establish a working group involving senior members of the construction industry to see how best they can facilitate working with Chinese companies. The Institution and its members work closely with UKTI and the Chinese International Contractors Association (CHINCA) in the UK and China.