China Harbour Engineering Company (CHEC) has been named as the preferred bidder for a £300 million marine works package on the Swansea Bay Tidal Lagoon project, in a deal that could kick-start a programme of Chinese investment into UK infrastructure, while also seeing British expertise and technology exported to Asia.
The works package includes the construction of the six-mile long tidal lagoon wall. Under the terms of the deal, CHEC said it will commit approximately 50% UK content for the delivery of the package, has 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.
CHEC will also sign a Memorandum of Understanding with developers Tidal Lagoon Swansea Bay Plc (TLSB) for the development of tidal lagoons in Asia, potentially opening a major new export channel for British expertise and technology.
"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," commented Lin Yi Chong, President & CEO at CHEC. "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."
Commenting on the news, Richard Graham, Member of Parliament for Gloucester, said: "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.
"As one of the Prime Minister's Trade Envoys, Chairman of the All Party Parliamentary China Group and MP for Gloucester, home of Tidal Lagoon Power's headquarters, I am excited about both the supply chain opportunities for local firms and the long term export potential of tidal energy - not least to China."
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. 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.
Tidal Lagoon Swansea Bay Plc will through the summer run further tenders for the construction of a Turbine Assembly Plant in Wales, and for the lagoon's public realm and buildings work.
Late last month, British construction firm Laing O'Rourke was named the preferred bidder for a £200M contract to build the 410m turbine house and sluice gate structure as part of the £1 billion project.
