Global tenders for Beijing's 2008 Games mega construction projects have received strong response from Hong Kong businesses.

Liu Zhi, deputy director of Beijing Municipal Development Commission, said more than 20 Hong Kong business consortiums have asked for copies of the tender documents soon after the capital city began inviting tenders for eight colossal Olympic projects on October 25.

The construction, operation and management of these projects, with a total investment of 14.5 billion yuan (US$1.7 billion), are open to tenders from both domestic and overseas companies. They are all related to major sports venues and facilities including the National Stadium, National Gymnasium, National Swimming Centre, Olympic Village and Olympic Park.

"Of the 20 consortiums, five or six have contacted us and expressed their intent to bid," said Liu, who is attending a two-day annual seminar on economic co-operation between Hong Kong and Beijing at the Hong Kong Convention & Exhibition Centre.

Declining to disclose details of the Hong Kong bidders, Liu said many of them have established businesses in Beijing and are well aware of the business environment there.

"We have noticed that some Hong Kong companies have devoted much financial and personnel resources to explore ways of winning the Olympics projects," he said.

Hong Kong has been the first overseas market that the capital city is trying to attract funds from for the projects.

According to forecasts by the Beijing Organizing Committee for the 2008 Olympic Games (BOCOG), it needs at least 30 billion yuan (US$3.6 billion) to build new sports venues or improve existing facilities. The city itself will need some 180 billion yuan (US$21.7 billion) to 300 billion yuan (US$36.1 billion) for the Games, analysts estimate.

More than 200 enterprises worldwide have already approached the Beijing Municipality to express their interest, said Liu.

"We believe more Hong Kong companies will be interested in the projects. Our offers are attractive, they should not miss the chance," said Liu.

"We have taken into full account the use of the sports venues and related facilitates after the Games so that investors can make profit from their investment as soon as possible," he said.

Meanwhile, the municipality has promised to offer a wide range of incentives to investors including cheap land, lower tariffs and additional commercial developments.

For instance, the National Stadium - the venue of the opening ceremony, closing ceremony and soccer finals - is designed to host world and domestic sports events, soccer competitions or large entertainment performances.

The operators can also make money by renting or selling facilities such as the VIP boxes and luxury seats.

The municipal government will directly fund part of the estimated 3 billion yuan (US$361 million) project, and provide incentives to non-government investors in terms of land usage and other areas, according to Liu.

However, insiders said bidders should well understand the game rules before submitting tenders.

The Beijing government has introduced the concept of "ownership" to bidders, which means winners will not only take care of the design and construction, but also the operation and management after the Games.

"The general practice is that companies swarm to compete for design and construction because they are considerably profitable, while companies are reluctant to bid for the right of operation of the buildings because the returns are not quick. The Beijing officials adopted the new bidding method to try to avoid the dilemma," said an insider who did not want to be named.

It means a risk for investors on long-term sports venue operations, sometimes 20 to 30 years, he said.

The bidding process will last from now until July next year and is in two stages.

First, the pre-qualification stage calls for expressions of interest for tenders, and applicants are asked to submit all the required documents to the Olympic Projects Office before December 28. Only those who are selected qualify for the next stage.

The second stage will select the final winners.

All the construction work is expected to end by the middle of 2006, leaving about one-and-a-half years for trial runs, according to Liu.

(China Daily)

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