After winning a tender in ways unorthodox enough to land two engineers in jail, a Sichuan SOE has become the first Chinese company to be involved in a major transport infrastructure project in the Arctic region. A rather peculiar kind of partnership with a German bridge-builder helped a company whose previous activities abroad were concentrated in Eritrea to be chosen over established Western competitors to build the steelwork for large bridge in northern Norway. The fact that the project, started in late 2013, has gone unimpeded despite the freeze in Chinese-Norwegian relations after Liu Xiaobo’s Nobel provides an interesting data point to understand what exactly falls under the boycott.
An unprecedented success
In October 2013, Sichuan Road and Bridge Group (SRBG, 四川路桥), owned by the provincial government, won the tender to build the steelwork of the Hålogaland bridge near Narvik, some 200 km inside the Arctic circle. Over 1500 m long, the suspension bridge will be the second longest of its kind in the country and will shorten the travelling distance northwards from Narvik by 18 km. It was the first time a Chinese contractor was awarded such a project in the West, and SRBG’s first-ever contract in Europe.
SRBG has completed a number of technically impressive projects in China, such as the suspension bridge with the second longest mainspan in the world, the Xihoumen 西堠门 that links Zhoushan 舟山 to the mainland. In contrast to the multiple collapses of often just-built bridges that have made news in China in recent years, SRBG has a comparatively clean record. Serious damages to SRBG bridges have been blamed on exceptional natural conditions, such as the 2009 collapse of the Chediguan 彻底关 bridge SRBG was chosen to rebuild after the Wenchuan earthquake. (The new collapse was personally explained by company chairman Sun Yun 孙云 as due to the unforeseeable impact of an “enormous rock”.) But a company partially established by SRBG, Sichuan Chuanjiao Road and Bridge (四川川交路桥有限责任公司), has a decidedly less stellar record: the partial collapse in 2013 of the third Tuojiang 沱江 bridge Chuanjiao was building in Ziyang, eastern Sichuan caused five deaths. At the time, the chairman of Chuanjiao was Huang Jinping 黄金平, also a vice-general manager at SRBG. Huang would eventually fall victim to an investigation for “serious violations of discipline”, usually a euphemism for corruption.
Impressive though SRBG past achievements in bridge building already were, the Norwegian tender was an unprecedented success. Although the company’s activities abroad began as far back to 1979, their major operations so far have been in Cambodia, Yemen, Tanzania, Micronesia, and most saliently Eritrea, where SRBG have even diversified into gold mining. Winning contracts in at least some of those locations, Eritrea in particular, surely involves more government-to-government contacts to a greater degree than technically outcompeting other bidders. SRBG’s Hålogaland contract, the second cheapest contender for which was MT Høygaard, looked like the first such infrastructure project awarded to a Chinese company in Scandinavia.
An unorthodox partnership
The thing is, SRBG weren’t competing on their own. As I, and seemingly nobody else in a Western language, reported in 2013, SRBG won the tender in partnership with DSD Brückenbau, part of a German group with a long experience in steel construction in Europe, the Middle East and China. The exact nature of the partnership remained elusive: while Chinese reports mentioned SRBG had sought DSD’s help to enter the European market, the contract was formally awarded to a joint venture of SRBG with a little-known Serbian company that shared an address with a DSD subsidiary. The German connection was still obvious: the contract was officially signed on SRBG’s side by He Saizhong 何赛中, a senior engineer with a decades-long career in the German bridge-builder, not known to work for the Sichuan SOE.
The truth would emerge a year later, during a trial conducted in Saarbrücken, Germany. He Saizhong, the DSD engineer, and Frank Minas, a colleague, were accused of defrauding their employer by preparing the Hålogaland bid at DSD, only to eventually present it as their own. As I have learnt from Helmut Jakob, a journalist who covered the trial for local media, the two first convinced the company to act as a subcontractor, managing the project through a Serbian company they were connected to. In the end, DSD was completely left out of the project when the project management was taken over by a company led by the wives of the two engineers. He Saizhong and his colleague were found guilty of ‘breach of trust’ (Untreue) and sentenced to four years’ imprisonment. The Chinese company has not itself been accused of fraud.
Although He Saizhong’s central role in the project should have made it clear to everyone from the beginning that the well-known German company was in some way behind SRBG’s bid, the Norwegian public roads authority (Statens vegvesen) have denied they were misled by the way the offer was presented. Einar Karlsen, a project manager for the project, told me in March that, although DSD had been originally mentioned as a possible subcontractor, the German company “was not important” in the evaluation of the bid. It is possible that the evaluation was only based SRBG’s past merits, but the fact that the offer was prepared at DSD by a DSD team, together with reports that SRBG had sought to partner with the German company, make it safe to conclude that SRBG did indeed benefit from the unorthodox way the offer was prepared. A source suggests it was He Saizhong who facilitated the Sichuan company’s partipation in the project.
An unimpeded deal
Construction is going ahead, seemingly unhindered by the German trial and the imprisonment of the contractor’s “representative”, and is expected to finish in 2017. Norwegian reporting on the bridge, an important project for the region, appears to have made no mention of the trial in Germany before an article published in a local newspaper last September (paywalled).
The defrauded German company and the now imprisoned He Saizhong are not the first to be sacrificed for Sichuan Road and Bridge to win contracts. In 2008, a manager with SRBG had admitted to bribing an official to earn the company the contract for the Xinlongmen 新龙门 bridge near Chongqing.
The fact that SRBG’s participation in a major project in Norway was not blocked by Chinese authorities is a telling detail about the unofficial boycott imposed on Norway after the award of the Peace Nobel prize to Liu Xiaobo in 2010. This could be the result of a publicity calculation. Most known aspects of the boycott can be interpreted as ways of showing the Norwegian public they were being punished: it became harder for Norwegians to get Chinese visas, salmon shipments were rejected; real-estate tycoon Huang Nubo 黄怒波 could not buy a 100 hectare plot in the north of the country until relations get better. Not letting SRBG bid to build their bridge would have simply meant a European competitor would build it.