SINGAPORE: Keppel Corp, the city-state's largest diversified company, said its Chinese venture would be paid about S$100mil for providing maintenance services at an airport in Guangzhou. It plans to use this contract as a springboard for further investment in China.
The venture, 25% owned by Keppel, would pursue other maintenance contracts for hospitals and schools in Guangzhou from the government and state-controlled companies, said Yick Ping Wong, managing director of Keppel Integrated Engineering, a unit of Keppel Corp.
The company was also chasing contracts for maintenance services in Beijing, he said.
Outsourcing “is growing within the region as people think it's more efficient'', Yick said in an interview. “China is a natural place for growth'' because the government is gradually letting go of central control.
The Chinese state government is passing control of its civilian airports to local authorities, and also plans to almost double the number of commercial airports to 237 by 2010 as air travel increases in Asia's fastest growing economy.
Excluding the 15-year Guangzhou airport deal, Keppel has S$130mil worth of contracts to provide maintenance services. – Bloomberg