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S'pore closer to infrastructure hub goal
Publication Date : 05-05-2014
Seven global players in the lucrative infrastructure sector have decided to base key operations here.
Their decisions, unveiled recently by the Economic Development Board (EDB), represent a major step forward in Singapore's push to become the region's hub for infrastructure development.
The projects covered by the sector include water projects, transport works, and energy projects including those in the fast-growing renewables industry.
The seven multinational firms which have decided to house their regional or global infrastructure- related functions here include the subsidiaries of big names such as Samsung and Hitachi.
They will use Singapore as a base to manage and develop projects spanning Africa and the Asia-Pacific, including financing and developing projects for renewable energy, water, building and construction, and transport.
In return, they will be granted tax incentives, among other help from the government.
The EDB late last month announced that it had been working closely with the firms to provide support and guidance as they planned their expansion plans here over the past few months.
Goh Chee Kiong, executive director of clean technology and building and infrastructure solutions at the EDB, said this was part of continuing "whole-of-government" efforts to position Singapore as a hub for infrastructure developments across the region. "We are seeing a confluence of interest, with Singapore already on the radar for several companies."
Most of the firms have made decisions to ramp up operations here but have yet to make their plans public.
For example, Samsung's construction and investment arm, Samsung C&T, has increased headcount in its regional headquarters for South-east Asia here to about 1,300 employees. The base here oversees regional engineering, procurement, construction and project development.
Hitachi Capital, the finance arm of Hitachi, recently increased its numbers here to include a 10-person team for project financing loans.
Australian project development consultancy Aurecon and India's engineering and construction giant Punj Lloyd will be announcing significant developments later this month.
Without revealing exact figures, an Aurecon spokesman said the firm will be setting up its Asia regional headquarters in Singapore to drive projects in countries such as China and Myanmar, with plans to treble staff here in the next five years.
Anthony Barry, Asia general manager for development and operations at Aurecon, said Singapore offers an "excellent investment environment". "(Singapore has) a strong talent pool of quality professionals, a business-friendly ecosystem, and strong connectivity with the fast-growing regional markets," he said in a statement.
Punj Lloyd will place its project development arm in Singapore, with a focus on managing, financing and drawing up legal agreements for its projects worldwide.
This is not its first foray into Singapore, having acquired Sembawang Engineers and Constructors - then known as Sembcorp Engineers and Constructors - from local-listed Sembcorp Industries in 2006.
Punj Lloyd corporate affairs director Luv Chhabra said Singapore was chosen for its undisputed status as a regional and global financial hub. "Compared with many countries, Singapore has far better access in terms of technical capabilities, global finance for buying and lending, and a strong legal system and regulations."
While projected investment figures were not available, he revealed that the first deal managed out of Singapore - a peat-fuelled energy plant in Rwanda - will be worth up to US$400 million if it goes through.
According to EDB statistics, infrastructure development accounts for S$2 billion (US$1.5 billion) in accumulated value added to Singapore's economy. The sector hired 15,000 people in 2010, and EDB expects that to grow to 19,000 by 2020.
Associate Professor Tan Khee Giap, co-director of the Lee Kuan Yew School of Public Policy's Asia Competitiveness Institute, was not surprised to hear of the investments by foreign companies. Infrastructure development for the region was "long overdue", he said, citing funding problems. "These firms are only the first wave.
More will position themselves in Singapore to take advantage of developments in the region."
He cited the Asian Infrastructure Investment Bank, a multilateral bank that China plans to set up to focus primarily on funding infrastructure projects in Asia.