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Chinese money? Chinese workers?

The Wellington City Council seems pleased with a memorandum of understanding that it has signed in Beijing. The signing ceremony took place in front of a banner stating “Wellington Airport Expansion Project Signing Ceremony.” A photo shows the banner behind Councillor Jo Coughlan, who sits between the bosses of a Chinese property development company and a Chinese construction company as the three of them exchange signatures.

The photo is in Friday’s DomPost [1], as part of a report from Collette Devlin who travelled to China with a Wellington group led by Mayor Wade-Brown. [2] But the council itself has said nothing about the document that it has signed.

Does the banner mean that the council has signed up for a longer runway to be built? Such a deal seems unlikely, as the council is only a minority shareholder in the airport, and Infratil’s plans for extending the runway have not yet been finalised or costed. In fact, the specifics of the Beijing agreement are somewhat confused in the DomPost report. Devlin first writes that the two Chinese groups have agreed to support a string of Wellington projects, not only the airport runway but also a convention centre, new hotels, and the redevelopment of Shelly Bay. Later she says these projects are only “under discussion.” And then there’s a caption that says the agreement is for “collaboration” with the council.

Make of that what you will. The photo shows Kevin Lavery and Celia Wade-Brown watching and smiling as the document is signed. It must have been the high point of this week’s visit to China, which included a Wellington business delegation led by Cr Coughlan. The delegation included Wellington Company managing director Ian Cassels, Willis Bond director David McGuinness, Morrison & Co chairman Rob Morrison, and Port Nicholson Block chief executive Jason Fox.

Would McGuinness be happy for a Chinese construction company to build Willis Bond’s projects instead of the usual Wellington contractor? He seems to be focusing only on Chinese finance. The DomPost quotes him as saying that the Chinese investors are looking at options for the convention centre and hotel, which his business is involved with. Fox, who the DomPost says is leading the Shelly Bay planning [3], is more cautious. He said “it is still early days.” As for the airport company, there’s no quote in the report from Rob Morrison.

Nevertheless the Chinese seem ready to start work, even before budgets have been finalised or business cases have been prepared or tenders have been sought:

Beijing Construction Engineering Group president Dai Binbin said his company worked with the best private sector entrepreneurs in China and asked Wellington to be confident in his business. In 2013 the company constructed Manchester’s City Airport project in the UK. The Wellington delegation had impressed his investors and fostered confidence in the business people of Wellington, Dai said. “This is just the beginning. We are interested in every project, there are a lot of other things to be done.” Businesses in China were encouraged to go abroad and look for opportunities and the Chinese Government would work in support of the projects they were involved in, he said.

Fu Wah Properties president Chiu Yung said discussions had started during a previous visit to Wellington. He said completion of the projects would attract more international tourism and thus more demand for hotel rooms in the city. “I look forward to being part of the tourism element of Wellington and I extend my gratitude to the Wellington Mayor Celia Wade-Brown, who brought a brilliant delegation of business representatives to Beijing. Fu Wah Properties chief engineer Henry Lau Rics said he looked forward to working with Wellington. “It’s a beautiful city with lots of opportunities and we can see the [Chinese] government further supporting us in Wellington,” he said.

One definite result from the trip is that the mayor of Beijing will be coming here next year to “further promote the sister city friendship.” There’s also mention of financial support for the long-discussed Chinese garden on the waterfront. And there’s to be an annual soccer match between the Wellington Phoenix and two teams from Beijing.

But as for the arrival of a big Chinese construction company in Wellington. Such planning should await the completion of the inquiry into the terms of employment for Chinese engineers [4] who’ve been working on locomotives at the Hutt railway yards – there’ve been allegations that they were being paid $3 an hour [5]. Announcing the inquiry, the Rail and Maritime Transport Union expressed concern about the danger of local workers being replaced by cheap labour from overseas. A possibility that which would do nothing to help the council’s aim of improving the Wellington economy.

September 13: Two days after the signing ceremony, the council released details [6], saying the deal is “to explore funding for proposals for Wellington International Airport’s proposed expansion and hotel, the convention centre and hotel and housing developments in Shelly Bay.”