GSD questions China deal after UK company goes into liquidation

The GSD has again voiced concern about the Gibraltar Government’s planned joint venture with China’s Beijing Liujian Construction Group, following reports that a Chinese-owned UK-based company specialising in modular construction has gone into liquidation.

The Opposition said the development highlighted weakness in demand for modular construction and undermined Sir Joe Bossano’s hopes that the deal would drive economic growth in Gibraltar.

The party was reacting to a report in the Sunday Times that UK-based CIMC MBS Limited, the modular construction subsidiary of China International Marine Containers, had gone into liquidation with liabilities of £11m, mostly owed to another CIMC company.

“Sir Joe Bossano stated in Parliament on 1 June that the Government was talking to the UK company that delivered the Newcastle University modular accommodation block at a cost of £75 million,” said Roy Clinton, the GSD MP who shadows the finance portfolio.

“That company was CIMC MBS Limited which is now in creditors’ voluntary liquidation due to ‘having suffered a reduced order book’.”

“If the idea of undertaking this project was in my view flawed economically, it is now also concerning to see the report in the Sunday Times that CIMC were said to have constructed ‘faulty buildings’ in the UK.”

“All the financial benefits from this flawed plan will flow to China at the expense of our local construction industry and all just to provide CIMC with a showcase project in Gibraltar and give a private developer a cut price Elderly Care Nursing Home?”

“I will be probing this joint venture further in Parliament as the more we understand it the less it makes any economic sense for Gibraltar and the welfare of our elderly.”

The Gibraltar Government did not respond to requests for comment.

However Sir Joe told GBC that the joint venture between the Gibraltar Construction Company and the Chinese firm Beijing Liujian Construction Group had not settled on a contract with CIMC’s UK company.

He said the Gibraltar Government’s position was protected by virtue of its joint venture partner.

The 50/50 joint venture with the publicly-owned Chinese group is to build an elderly people's residence using modular construction techniques.

The Chinese parent company will produce the modules in China and ship them to Gibraltar.
Sir Joe told Parliament earlier this month that the deal and the modular construction technique would deliver the building faster and cheaper than using traditional labour-intensive construction methods.

But the GSD has questioned the effect this will have on the local construction industry.