Sheffield Council has been generating worldwide headlines over its recent deal with a Chinese company to provide £200+ million investment in Sheffield with a possible total of £1 billion over the next 60 years; with the initial investment apparently going towards funding four or five projects of the council’s choosing and seemingly managed by them.
But what projects and what form will this “investment” take?
Who will be in overall control/providing on-going management and why have so few details been published into the public domain regarding such matters?
Usually, a company approaches the council with an idea for a self-funding enterprise seeking planning permission, which is usually only forthcoming after public scrutiny and debate.
Yet on this occasion, if I’m reading it correctly, it appears a Chinese company (about which little of substance can be found on the internet) is willing to pour substantial sums into unspecified projects of the council’s choosing, under council management, with the start-up of these unspecified projects seemingly being a foregone conclusion.
According to the Financial Times website, Sichuan Guodong Construction Co Ltd is principally engaged in the manufacture and distribution of boards.
The company’s businesses include sale of boards, engineering construction, glass deep-processing, property management, sale of impregnated paper, and hotel operations, as well as others.
The company’s main products include middle and high-density fibre boards and particle boards, among others, which are applied primarily in the manufacture of furniture.
Through its subsidiaries and affiliates, the company is involved in the manufacture of boards, property management and property investment. Year on year (the company’s) revenues fell – 26.98 per cent from £773.03m to £564.43m.
This, along with an increase in selling, general and administrative costs has contributed to a reduction in net income from a gain of £6.04m to a loss of £57.11m.
Therefore, is this seemingly poorly performing company intending to build manufacturing operations in Sheffield? Or could it be that it is the references to hotel operations, property management and property investment that are the most significant?
Will the company and/or its subsidiaries and affiliates be providing what amounts to financial loans (ie “investment”) to enable the council to fund pet projects that it can’t raise finance for in this country?
In which case, what are the terms attached to such loans, I wonder? Or is it wanting to build yet more student accommodation for presumably increasing numbers of mainly overseas scholars from China?
Despite all the recent publicity hype, this deal tends to raise many more questions than answers.
So perhaps the council would care to enlighten sooner rather than later.
Robertshaw Crescent, Deepcar, Sheffield, S36