The development trend and output value of China's engineering contracting industry
According to the 14th Five-Year Plan and the Outline of the Long-Range Objectives Through the Year 2035, during the 14th Five-Year Plan period, China plans to add 3,000 kilometers of intercity railways and urban (suburban) railways, basically complete the Beijing-Tianjin-Hebei, Yangtze River Delta and Guangdong-Hong Kong-Macao Greater Bay Area rail transit networks, and add 3,000 kilometers of urban rail transit operations. The "14th Five-Year Plan" for National Urban Infrastructure Construction points out that the classification of urban rail companies should be promoted, the functional level of rail transit in super-large and mega-cities should be optimized, the urban rail transit express lines should be rationally arranged, and the construction of urban (suburban) railways should be coordinated and facilities should be interconnected. The "14th Five-Year Plan for the Development of Modern Comprehensive Transportation System" also makes it clear that it is necessary to build a metropolitan area on the track, build a multi-level rail transit network in the metropolitan area, promote the integration and connection of trunk railways, intercity railways, urban (suburban) railways, and urban rail transit, and reasonably promote the cross-line operation of rail transit.
With the continuous expansion of urban rail transit and urban (suburban) railway infrastructure construction, it will bring new opportunities to the engineering contracting industry.
Analysis of the output value scale of the engineering contracting industry
Project contracting mainly refers to the entrustment of the owner, the enterprise in accordance with the contract, to undertake the design, procurement, construction, trial operation services and other work of the project, and to be responsible for the quality, safety, construction period and cost of the contracted project. There are three main types of engineering contracting: infrastructure and civil engineering, resource-based engineering, and manufacturing engineering. Engineering contracts can be divided into general contracting, sub-contracting, subcontracting, labor contracting and design-construction contract.
In recent years, with the continuous growth of fixed asset investment in the whole society, the construction market has developed steadily and healthily. In 2023, the national construction industry will complete an output value of 3160 trillion yuan, a year-on-year increase of 128%。In 2023, the construction projects of construction enterprises across the country will be completed with an output value of 1375118.2 billion yuan, a year-on-year increase of 077%；In 2023, the contract value signed by construction enterprises across the country will be 7247310700 yuan, a year-on-year increase of 17%；In 2023, the amount of new contracts signed by construction enterprises across the country will be 3560401900 million yuan, a year-on-year decrease of 28%。
The total output value and growth rate of China's construction industry
, the development trend of the engineering contracting industry
1) General contracting has increasingly become a common mode in the industry.
The general contracting model is a project management method that emphasizes the leading role of design in the process of engineering construction. It solves the problem of mutual constraints and disconnections between them by integrating design, procurement and construction, so as to ensure that the schedule, cost and quality of the project are in line with the contract and achieve better investment benefits. In addition, the general contracting model clarifies the main body of responsibility for the quality of construction projects, which is conducive to investigating the responsibility for project quality and determining the responsible persons.
In recent years, the department has issued a number of policies to promote the application of the general contracting model. The "14th Five-Year Plan for the Development of Engineering Survey and Design Industry" issued by the Ministry of Housing and Urban-Rural Development proposes to steadily promote the general contracting mode of the project, and encourage design enterprises to undertake technically complex construction engineering, municipal engineering and technology-led industrial engineering general contracting projects through the leading role of demonstration projects, so as to improve the scientificity, safety, fineness and construction convenience of design. **Investment projects and state-owned enterprise investment projects are also encouraged to give priority to the EPC model.
The Ministry of Housing and Urban-Rural Development also issued the "Several Opinions on Further Promoting the Development of EPC", pointing out that EPC is an internationally accepted project management method. Vigorously promoting the general contracting of the project is conducive to the deep integration of design, procurement, construction and other stages of the work, give full play to the technical and management advantages of the general contracting enterprises, improve the level of engineering construction, promote industrial transformation and upgrading, and also provide services for the implementation of the "Belt and Road" strategy.
In general, the general contracting model plays an important role in the construction of the project, and the first department aims to promote the development of the general contracting model through the formulation and implementation of relevant policies, so as to promote the quality and efficiency of the construction project.
2) Driven by new infrastructure and other industries, the engineering contracting industry will usher in huge market opportunities.
At present, the global economy is still in the turbulent adjustment stage of slow recovery in the post-crisis era, and countries are trying to stimulate economic recovery by increasing infrastructure investment, and the engineering contracting market is one of the major breakthroughs to promote the economies of various countries out of the slump. Driven by the acceleration of infrastructure investment and the transformation and upgrading of infrastructure in countries along the "Belt and Road", China's engineering contracting industry is facing huge market opportunities. Driven by the development of new infrastructure and other industries, the output value of the general contracting industry continues to grow, and its total output value will continue to show a slow growth trend in the future, and it is expected that by 2024, the output value of the engineering contracting industry will exceed 32 trillion yuan.
, the competition pattern of the engineering contracting industry
At present, the competition pattern of the engineering contracting industry is relatively stable. From the perspective of major market participants, the enterprises engaged in China's engineering and technical service industry are divided into two categories: national comprehensive engineering and technical service enterprises and regional urban rail transit technical service enterprises.
1) National comprehensive engineering and technical service enterprise.
Most of these companies are the original subordinate state-level design units and comprehensive large-scale enterprises, which are characterized by large asset scale, large number of employees, strong comprehensive strength and industry influence, and occupy an advantage in undertaking national infrastructure projects and large-scale industrial and public utility construction projects.
2) Regional urban rail transit technical service enterprises.
Most of these companies are local state-owned enterprises, generally small in scale, focusing on engineering and technical service projects within a certain region, with uneven comprehensive business strength and technical level, with certain geographical advantages, and a certain brand influence and relatively stable market resources and customer groups in the local area.
At present, China's engineering contracting market occupies a large market share of large-scale construction enterprises with technology, management, equipment advantages and special qualifications. Large and medium-sized construction enterprises in developed regions with strong construction provinces also occupy a certain market share, mainly contracting regional large and medium-sized projects, while other small and medium-sized enterprises mainly undertake labor subcontracting, some professional subcontracting business and small projects. Although in recent years, some private and foreign-funded engineering service enterprises have entered the industry through joint ventures or mergers and acquisitions to participate in market competition, but for the time being, it has not brought major changes to the overall competition pattern of the existing engineering contracting industry.
Analysis of key enterprises in the engineering contracting industry
1) Shanghai Pudong Construction Co., Ltd. ***
Founded in 1998, Shanghai Pudong Construction Co., Ltd.'s main business includes infrastructure project investment, construction engineering, design survey and consulting, park development, production and sales of asphalt concrete and related products, environmental protection business, etc. The company has relevant qualifications such as Grade A design and first-class construction general contracting, and can provide a full range of comprehensive integrated services and EPC construction service capabilities for urban infrastructure construction. The company has completed the construction of many major public infrastructure projects in the Yangtze River Delta region, accumulated rich practical experience, and formed a mature project operation mode integrating infrastructure investment and financing, design and construction management.
2) Shanghai Tunnel Engineering Co., Ltd
Founded in 1993, Shanghai Tunnel Engineering Co., Ltd. is mainly engaged in the design, construction, investment and operation of urban infrastructure such as tunnels, roads and bridges, rail transit, water affairs, energy and underground space, as well as the manufacturing of some shield equipment. The company has undertaken the construction of most of the cross-river highway tunnels and rail transit cross-river sections at the bottom of the Huangpu River in Shanghai, and has obtained the "Special Qualification for Municipal Public Utility General Contracting" and "Grade A Qualification for Design Municipal Industry". In terms of rail transit, the company has successfully built the first local subway line for Nanjing, Hangzhou, Zhengzhou, Kunming, Wuhan, Tianjin, Urumqi, Nanchang and many other cities in China, with a cumulative construction mileage of about 836 kilometers.
3) Longjian Road & Bridge Co., Ltd. ***
Founded in 1993, Longjian Road & Bridge Co., Ltd. is mainly engaged in the construction and consulting design of highway engineering, municipal roads and bridges, as well as related infrastructure investment, operation and maintenance, maintenance and management. The company has the qualifications of highway engineering construction general contracting, municipal public works construction general contracting, highway engineering subgrade professional contracting, highway engineering pavement professional contracting, etc., and has successively completed the construction of Harbin Airport Road viaduct system project, Heilongjiang Heihe Century Square Reconstruction Project, Beijing-Harbin Expressway, Guangdong Chaozhou Bridge, Harbin Songhuajiang Highway Bridge, Fuzhou Airport Expressway Phase II Heshang Tunnel and other projects.
4) Beijing Urban Construction Design and Development Group Co., Ltd
The company is a comprehensive survey and design consulting unit that provides diversified services for urban rail transit, comprehensive transportation hubs, underground space development, industrial and civil construction, municipal, bridge and road engineering construction projects, and is also a leading engineering contractor among China's urban rail transit construction engineering design enterprises, providing customers with professional and high-quality whole-process services such as pre-project consulting, planning, investment and financing, survey and mapping, design, project management, engineering general contracting, project evaluation, and economic analysis. The company has the first-class qualification for general contracting of municipal public works construction, the first-class qualification for general contracting of construction projects, and other certificates.
For more industry information, please refer to PwC ConsultingAnnual Engineering Contracting Industry Market Segment Research and Investment Feasibility Analysis Report".At the same time, PwC Consulting also provides services such as industrial research reports, industrial chain consulting, project feasibility reports, specialized and special new small giant certifications, market share reports, 14th Five-Year Plan, post-project evaluation reports, BP business plans, industrial maps, industrial planning, blue and national manufacturing single champion enterprise certification, IPO fundraising feasibility study, IPO working paper consulting and other services.