Sheffield council urged to 'come clean over stalled China deal'

Opposition politicians are calling on Sheffield's Labour cabinet to come clean about where they stand on a mooted £220m investment deal with a Chinese businessman.

Thursday, 5th July 2018, 1:32 pm
Updated Thursday, 5th July 2018, 1:55 pm
Wang Chunming and Julie Dore

The deal, signed in 2016, was trumpeted by Sheffield City Council two years ago this month - promising millions in foreign investment into the city over the next three years, and up to £1bn over the following 60.

But plans to convert Sheffield’s Central Library into a 5* hotel failed to materialise and, as of April last year, an exclusivity deal with Chinese billionaire Wang Chunming, owner of the Sichuan Guodong Group, had not been signed.

At a meeting at full council this week, cabinet member for business and investment Mazher Iqbal, was unable to confirm whether any of the promised cash had arrived in the city.

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Responding to a question from a member of the public, he said: “We continue to have dialogue and are looking at a number of projects and how viable they are.

“How much of that £220m has materialised, as I said, we continue to have dialogue but it’s not as straightforward as it seems.

“There’s a challenge in China due to a policy change, but we continue to have delegations coming over to see us.”

The council also came under fire when a Freedom of Information request revealed it had spent more than £30,000 of public money sending officials to China.

in the 18 months between January 2016 and July 2017 council officials, including leader Julie Dore on one occasion, made multiple trips to China as they pursued a deal with Sichuan Guodong Group, as well as other investment opportunities.

Over £14, 800 was spent on hotels and more than £16, 000 on air fares, according to figures provided through the What Do They Know? website.

It is understood not all the spending related to activities solely connected with the Guodong Group deal. But that spending comes after the council revealed “in the region of £60, 000” has also been spent on administrative work relating to the partnership.

Liberal Democrat Councillor Martin Smith, shadow cabinet member for business and investment said: “There was a huge amount of publicity when this deal was announced, but since then it’s become shrouded in secrecy and questions continue to be dodged.

“Good quality foreign investment in Sheffield is welcomed, but the council needs to tell us what’s going on.”

Richard Wright, executive director of Sheffield Chamber, said: "It is obviously disappointing that Mr Wang has not taken up a number of potential projects that I believe were put in front of him. It has not stopped Chinese investment in the city though with the New Era development, managed by Jerry Cheung and using Chinese capital, at the forefront of these, although we would certainly like more.

“It is slightly worrying that China has put more restrictions on capital leaving the country which must have a dampening effect.

“We are confident however that Sheffield remains a good place to invest and the confirmation only yesterday that the southern loop and northern junction of the HS2 line are definitely in the hybrid bill can only strengthen that."