CR18BG's landmark Dubai hotel project deepens ties between China, the Middle East

China Railway Eighteenth Bureau Group Co Ltd, or CR18BG, a subsidiary of State-owned China Railway Construction Corp Ltd, plans to complete construction of Rotana Hotels and Resorts, a landmark hotel project in Dubai, the United Arab Emirates, in September 2023.

Upon completion, the construction project worth 340 million dirhams ($92.6 million) will further consolidate CR18BG's market presence in the Middle East market.

CR18BG found that the region's fast recovery from the COVID-19 pandemic, especially in tourism and other service sectors, will create growth momentum in the infrastructure market in the post-pandemic era.

Also of big help are many countries' medium- and long-term development visions, or national strategies to put their economic growth on a firmer footing via big-ticket infrastructure projects, expos, service and healthcare facilities, and educational institutions in the coming years.

As the main contractor of the Dubai hotel project, CR18BG began construction work in May 2020. It has integrated China's green building concepts and advanced technologies into its construction plan.

It has also adopted the advantages of China's industrial chain in the field of construction manufacturing, to meet its client's demand for ecological protection, energy saving and waste reduction. This it was able to do by using new materials and mature field practices, said Gao Jinping, general manager of CR18BG's Dubai branch.

Supported by 560 workers at the current stage, the company will build the 226-meter-high, palm tree-shaped hotel building to strengthen the UAE as a global tourism hub and position the emirates as a major tourism destination.

"While recovering from the impact of the pandemic, the UAE has set ambitious targets for the new decade, to further enrich the country's economic performance and facilitate the country to reach a high level of sustainability," he said.

The UAE, he said, is keen to overcome the current global shock, especially in pillar sectors including infrastructure development, tourism and aviation industries. Since the second half of last year, the UAE government has been busy formulating a number of new plans and strategies to achieve the country's vision for 2030.

One of the key factors is to continuously increase investment in the infrastructure sector to reach its goals for 2030. The notable progress during the construction work will not only effectively boost local job market, but also inject new momentum into Dubai's economic growth, said Gao.

Since the start of the construction, Rotana has already convinced the project's owner and consultants of its service quality and won the mechanical, electrical and plumbing (MEP) engineering contract, which is commonly awarded to professional MEP companies with special commercial license.

"The design of this massive project is unique, especially the outlook, hence it's a challenge to CR18BG, in terms of future constructions. Surely, Rotana Hotels and Resorts will be one of the landmarks of Dubai," said Yang Tingyu, manager of the Rotana project in Dubai.

After the pandemic broke out, the local government tightened the management of construction projects and other economic activities to prevent the spread of the contagion. CR18BG's Dubai branch has spent financial resources on ensuring its workers' physical and mental health.

For example, a bus used to fetch 60 workers to work earlier. Now, only 30 workers are included per ride to maintain social distancing as per the local authority's stipulations. This has also increased the Chinese company's operational costs.

"Projects such as the one in the UAE are bringing Chinese and local workers and professionals together to work shoulder to shoulder, underlining a shared humanity and a shared future in the globalized world," Yang said.

"Thanks to the closer ties between China and the UAE, local policies are fairly favorable to the Chinese business contractors. A growing number of Chinese companies, from both private and public sectors, have entered the UAE market in recent years, especially in Dubai and Abu Dhabi."

Yang further said the UAE, compared with other regional countries, welcomes foreign investment and is more tolerant of various cultures. Clients in the Middle East also pay heavy attention to contractors' qualifications and are cost-conscious.

CR18BG executives said the company will deploy more resources and manpower in target countries such as Saudi Arabia, the UAE and Qatar in coming years as the companies there have already built a large number of projects, including bridges, tunnels, buildings, roads, residential buildings, office complexes and other commercial buildings. They have advanced policies in attracting global businesses to build a presence in their markets.

Backed by China's strong industrial and supply chains, domestic companies still have more options to further diversify their market channels overseas, given the accelerating globalization and many economies' demand for building or upgrading infrastructure facilities, said Ma Yu, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

He said that China's proposal to explore third-party market cooperation can also generate decent financial returns for companies specializing in services, project contracting, equipment and material supply in both developed and developing economies involved in the Belt and Road Initiative, without any clash of interests.

China's outbound direct investment grew by 4.6 percent year-on-year to 206.14 billion yuan ($32.3 billion) in the first quarter of this year, data from the Ministry of Commerce showed.

The country's nonfinancial ODI in other BRI economies rose 5.2 percent on a yearly basis to $4.42 billion, accounting for 17.8 percent of its total ODI during the three-month period.

Chinese companies, with their mature experiences and expertise in building big-ticket infrastructure projects, have become tangible BRI growth drivers, said Wei Xiaoquan, a researcher specializing in regional economic development at the University of International Business and Economics in Beijing.

Cooperation projects related to the BRI have benefited from a string of measures taken by Chinese companies to minimize the coronavirus impact, and ran smoothly with no major delays in 2020, said the Ministry of Commerce.