Stadia China 2005 Wrap-up

The world's sports infrastructure companies are becoming more excited about the 2008 Beijing Olympic Games.

Some work has begun, but there's plenty more to do and plenty of opportunities for the world's businesses to get involved.

With about three years to go before the Games' opening day, companies are strongly competing to get involved in Beijing's infrastructure scene.  They want to provide everything from catering services and equipment, landscaping and security services to toilet bowls and theatre seats and enjoy the cash and marketing prestige that would come with such an opportunity.

Many of these hopefuls were out in full force at Stadia China 2005 conference, held from January 18 to 20 at Beijing's China World Trade Center.   The conference was organized by the Beijing Association for Science and Technology, the Beijing Olympic Technology Promotion Committee and The Beijing Urban Planning Society.

More than hundred international, multinational and Chinese businesses made sales pitches and worked exhibition booths in hopes of snagging an Olympic contract, but final decisions remained largely up in the air.

 "This conference puts your name out there," said Australian Simon Pendergast, Asia manager of bathroom products manufacturer Caroma and a resident of Beijing. "It at least means that we are here and puts our name out there for the chance.

"Everyone is competing.  It really depends on how you can tailor your package to meet the Chinese developer's needs."

Pendergast's company is competing against Chinese and larger American and European firms for a contract to provide Olympic restrooms with faucets and toilets. He lamented that only companies involved in the early stages of Beijing's Olympic planning, architects, general consultants or building contractors responsible for Games' stadiums have ongoing contracts. He said stadium builders will likely hold out as long as possible before signing contracts with the remaining companies so the former can better control costs.

Thomas Yi, vice-general manager of the State-owned China State Construction International Design Consultant Company (CSCEC - Design), which is building the National Swimming Center, or "Watercube" that will be used during the Olympics, said in an e-mail interview that contracting for the project has already begun and will continue for the next two years.

Yi said he was particularly interested in materials providers at Stadia 2005, but found them underrepresented at the exhibition.

International Assistance

With China's booming economy and increasingly competitive companies, one might wonder why the city is seeking foreign expertise to put on the Olympic Games.

"It's a matter of foreign experience, said Nagel Andreas, a commercial officer with Siemens Limited China, which has provided support for past Olympic Games.  "The Chinese are knowledgeable, but the organizers are looking for global companies with global experience.  Beijing has to live up to an international standard."

International companies at the conference, including Siemens, General Electric and 3M, have resumes that include decades of involvement in international sporting events.  Most have taken part in the Athens' Games, the proclaimed "Best Olympics Ever" in Sydney in 2000 or other events.

Australian companies, from sponsorship consultants and landscapers to steel manufacturers, have taken what they learned in Sydney and turned it into a niche business opportunity. They would now be very happy to offer their Olympic experience for hire in Beijing.  Led by the Sydney-Beijing Olympic Secretariat, the 37 Aussie companies in attendance constituted Stadia's largest national showing. Sandy Hollway, AO, former chief executive of the Sydney Olympics organising committee, hinted to Business Beijing that, notwithstanding the success of the Athens 2004 Olympics, "Australia is still leading the world in support for Beijing 2008."

Beijing's Plan

Beijing's leaders announced that the price tag for the "the best-ever Olympic Games in history" would be about US$37 billion about 2.5 years ago.

The announcement produced an outcry that questioned the Games' cost and whether the Olympic construction would pay off in post-Olympic Beijing.

Olympic construction was suspended from July 31 until November 10, 2004, when China's State Council met to consider Beijing's reconsidered Olympic plans. Work resumed on seven major venues, including the National Stadium, or "Bird's Nest," and the National Swimming Centre in late 2004, but, while some specific costs have been cut, the overall cost of the Games is expected to stay the same because of safety and security issues.

Beijing Mayor Wang Qishan, who also serves as executive president of the Beijing Organizing Committee for the 2008 Olympic Games (BOCOG), said, "As circumstances have changed over the past several years since Beijing won the Olympic bid, we have adjusted the budget accordingly for the 2008 Games.

"The new budget will be submitted to the International Olympic Committee for approval in May."

The mayor said that the principle of "putting people first" would be followed in Olympic construction and that sustainable development in the preparation for the Olympic Games would be in line with the ideas of "Green Olympics," "People's Olympics" and "High-tech Olympics." He said the construction of major venues would be completed by 2007, with plenty of time for pre-Games testing.

The city is also revising its construction plans, which is causing some uncertainty among architects, builders and potential contractors.

But, in his opening speech for Stadia 2005, Beijing Vice-Mayor Liu Zhihua said the city's goals were being "carried out comprehensively." 

Architect Mark Butler, associate director of Australia's PTW Architects, which designed the Watercube, said, "We need to keep prices as low as possible; it's just an overall attitude. There won't be anything in the building unless we need it." 

Though Butler has drawn up plans, he does not yet know what the final building will ultimately include. The Watercube will cost about US$100 million and is being funded by overseas Chinese and Hong Kong businessmen.  

One result of the uncertainty, however, was that eager, contract-vying companies at Stadia 2005 focused on ways they might be able to help Beijing and its Olympic contractors meet their aims. 

One area of Beijing's Olympic economy which is guaranteed to be profitable is the merchandising for Beijing 2008. The world's largest toy manufacturing company, Creata, brought 25,000 sample toys to give away during Stadia.  Creata's chief creative officer, Anthony James, told Business Beijing that "by the time 2008 comes around, Beijing will be firmly an 'attention economy.'  Companies like Creata, which specializes in grabbing the public's attention, stand ready to assist Beijing to become a true world city".

In the high-tech area, Siemens reported it had begun selling electronic equipment destined for Beijing's major Olympic stadiums last year, but it is still seeking a single contract for the entire Olympics, according to a conference catalogue.

"We will take this as an opportunity to show off our competence," said Zhang Fang, Siemens project director for the Olympic Games. "We want to show what we have learned from previous Olympics."

Beijing also aims to make the 2008 Olympics as environmentally friendly as possible, continuing China's general move towards a more sustainable economy. One goal is to reduce air pollution and decrease sandstorms blowing in from Mongolia. 

But when it comes to the details of achieving Olympic goals, the Australian companies at Stadia 2005, who helped host one of the "greener" Olympics in Sydney, said they believe they have found their niche in providing for Beijing.

Pendergast said Caroma has an advantage in the environmental area.

"If this is supposed to be the green games, our products save more water."

Other Australian companies were offering lighting that uses less electricity, sustainable landscaping and "environmentally responsible" steel.

Aside from budget constraints, one of the biggest challenges facing the hosts of a "people friendly" Olympic Games will be ensuring that precious funds are spent in a way that will benefit Beijing residents after the games.

Sunny Chen, project manager at the Hong Kong office of Design Landscapes International, which is based in Australia, represented one of several landscaping companies at the conference.

He said the idea of using lush lawns in Beijing's landscaping plans should be scrapped in favour of plants that will thrive in the Beijing climate and conserve Beijing's scarce water resources. He said that his company would create landscapes that can be easily maintained after the games, which he hopes will win his company a contract.

Zhang, of Siemens, said her company could help free Beijing's "grid-locked" streets and freeways with "intelligent traffic management," which involves coordinating buses, subways and traffic lights for a smoother traffic flow.

In the larger plan, to ensure that the major Olympic construction projects will be useful and profitable after the Olympics, Beijing is using a system called BOT, "Build, Operate, and Transfer," said Huang Yong, a Beijinger who works as a senior business development manager at the Australian Embassy.

For the first time in China, building contractors working on key projects, including the National Swimming Centre, the National Stadium and Olympic Village, will have to find investors or put up their own money if they are to build their stadiums. They will then have 30 years to operate the buildings in hopes of earning their money back, with a profit, before transferring the buildings into the hands of the government.

This model has meant that creating buildings with wider uses is a priority of the building contractors, including CSCEC - Design in its Watercube.

"The Watercube will be used as a water-related sports, leisure and recreational centre. It will become one of the most spectacular legacies after the Games," Yi said. 

PTW is helping accomplish this by adding a leisure swimming pool, spa, gym and sauna into their plans for the building in hopes of attracting post-Olympic crowds. But these nonessential elements await approval, even though construction has already begun.

The BOT model is a challenge for Chinese companies.

Despites plans to make multifunctional stadiums, it will be difficult to make such large and specialized venues profitable after the Olympics, said Huang.

But the Chinese companies, with a mix of international pride and optimism, have accepted the challenge, meaning that the Beijing 2008 Olympics will be as much of a showcase for Chinese builders, designers and other businesses as Chinese athletes.

"Chinese companies, through the Olympics, would like to be able to develop their own skills and expertise," said Huang. "So in the future it will be a good opportunity to go international."

He said Chinese businesses view Olympic construction as a chance to work with and learn from international companies, with the added advantage of having a world audience to view their final result.

In the future, this would mean the Chinese could do what Australian businesses have done at Stadia 2005, market their own successful Olympic business experiences.