China eyes Southeast Asia push with $10 billion Manila airport project

Above, passengers disembark from a Saudi Arabia Airlines plane parked at the tarmac of Ninoy Aquino International airport. Capacity at the Philippines’ main aviation gateway is at critical levels, although private sector proposals have been put forward for the airport’s expansion. (Reuters)
Updated 08 March 2018

China eyes Southeast Asia push with $10 billion Manila airport project

HONG KONG: CLSA, the offshore platform of Chinese investment bank CITIC Securities, is working on the finance for a new $10 billion airport in Manila as part of its push into Southeast Asia and China’s ambitious Belt and Road initiative.
In an interview this week, CLSA chairman Tang Zhenyi said that CLSA also planned to open new offices in Vietnam, Pakistan and Dubai this year as the Asia-focused broker continued its expansion into investment banking.
Introduced in 2013, the Belt and Road project is aimed at building a modern-day economic “Silk Road,” connecting China by land and sea to Southeast Asia, Pakistan and Central Asia, and beyond to the Middle East, Europe and Africa.
Beijing has called on financial firms to develop overseas lending businesses to help connect China with old and new trading partners including the 10-member Association of Southeast Asian Nations (ASEAN).
The Manila airport project, to be developed south of the Philippine capital, is still awaiting government approval but CLSA has held preliminary talks with potential Chinese backers for the deal, Tang said.
“It looks like we are in good shape to do this. It’s a $10 billion minimum project,” he said. “Citic and CLSA are in the perfect position to talk with all the Chinese financial institutions.”
Tang and CLSA did not give the location or further details of the project. Local media have reported competing airport proposals are currently being studied by the Philippines government.
The involvement in the airport project by CLSA, which was bought by CITIC Securities in 2013, comes at a time it is aggressively expanding its investment banking advisory services beyond its broking origins, by leveraging its China ties.
“China has the capital, has the market. These countries have the need,” he said, referring to the ASEAN countries’ push to boost infrastructure investments.
Tang, who worked for China’s Ministry of Finance and for the World Bank in Washington before joining Citic Group in 2011, became chairman of CLSA in November 2016.
Last year, the company returned to its CLSA branding, dropping the name Citic CLSA, although it does operate as the international arm of CITIC Securities.
As part of its strategy to grab a bigger share of investment banking deals in Asia, CLSA is also in talks with Pakistan’s ministry of finance to help the country sell Panda bonds — debt sold by foreign entities to investors in mainland China.
Tang said CLSA is in the middle of a transformation, and plans to add up to 15 bankers in Southeast Asia this year as it seeks to diversify from its Chinese roots. Of its 120 current bankers, about 80 are involved with China-related projects and 40 with ASEAN business.
“We are hoping by adding more ASEAN content into the whole company, we will see it more 50-50 (between ASEAN and China).”


Lebanon’s $15bn blast repair bill adds to economic misery

Updated 06 August 2020

Lebanon’s $15bn blast repair bill adds to economic misery

  • Beirut port devastation brings warnings of housing crisis and billion-dollar hit to exports, imports

BEIRUT: Lebanon could face a repair bill of up to $15 billion in the aftermath of a cataclysmic chemical blast at Beirut port, according to a top government adviser.

The explosion, which was felt as far away as Cyprus, killed at least 100 people, wounded thousands and left an additional 300,000 Beirut residents homeless. 

It is thought to have been caused by nearly three tons of ammonium nitrate, a common agricultural fertilizer, that was confiscated in 2013 and improperly stored in warehouses. But after months of economic misery, the collapse of the currency and mounting civil unrest, it is being seen as the consequence of years of neglect, financial mismanagement and corruption as across the country.

Charbel Cordahi, an economist and financial adviser to the president, estimated the cost of damages from the explosion, including compensation, at around $15 billion. 

“Up to 70 percent of Lebanon’s trade channels through the port of Beirut,” he told Arab News.

“Airports and other ports in the country can facilitate only 30-40 percent of this trade, and opening the borders with Syria can facilitate another 20 percent. This means that at least $5 billion of imports will not find their way to the country, and another $2 billion of exports will stay on ground in the coming eight months. This represents a loss of around $4 billion, or 15 percent of gross domestic product,” he said.

He added that without an international aid program, “Lebanon cannot face this disaster.”

The explosion caps months of misery for the Lebanese, nearly half of whom now live below the poverty line. Popular anger directed at the government and political classes has swelled as a wider economic crisis has been made worse by the impact of the coronavirus pandemic.

Efforts to assess the damage at Beirut port, the country’s main trade gateway, are already underway. The second priority will be to restore food security and ensure the country does not run out of wheat after grain silos were destroyed, while also making sure residents who have lost their homes are rehoused as quickly as possible. Maintaining medical supplies and mitigating the environmental impact will also be a priority for city chiefs.

Many residents of the city are unable to return to their homes, even if their buildings remain visibly intact, because of the potential structural damage caused by the 4.5 Richter-scale blast.

“We need other countries to help us reconstruct Beirut,” Gen. Mohammed Kheir, secretary general of the Higher Relief Council, told Arab News. “We would be grateful if each country rebuilt a street or neighborhood in Beirut, like they did following the 2006 Israeli aggression. That would be the best way.”

He also appealed for emergency prefab homes for families for whom the government may not be able to provide housing.

Beirut Gov. Marwan Abboud, who estimated the primary damage at $3-$5 billion, appealed to the international community and the Lebanese diaspora to help.

Health officials had told Arab News that the country was running low on medical equipment, especially items needed for major surgery, and hoped that aid from abroad would fill the gap.

It is still too early to assess the full environmental impact of the blast, but environmental expert Mostapha Raad said a potentially bigger catastrophe may have been averted when the wind carried away a toxic cloud filled with nitric acid away from land and toward open sea.

“We were afraid the ammonium nitrate residue would lead to cooling off the weather and causing acidic rain, but according to tests on air samples, the result was green and the cloud disappeared over the sea,” he said.