Sheffield’s £1bn Chinese investment deal called off

A 60-year investment deal worth £1bn to Sheffield has fallen through after the Chinese construction firm called off plans.

Sheffield City Council first announced in 2016 that its agreement with the Sichuan Guodong Construction firm would bring £1bn into the city for major developments including a scheme to turn the city’s library into a hotel. Its first tranche of funding was set at £220m in 2016.

At the time, it was hailed by council leader Julie Dore as a the “first deal of its kind to be made by a UK city” and a “real partnership.”

The council said it would work with Guodong and its chairman Mr Wang Chunming to identify other private-sector opportunities in the city if desired, but developments at West Bar and for a 5-star hotel in the Central Library building, first put forward three years ago, will not be taken forward and there are no future plans or projects likely to be considered.

During the last three years, Sichuan Guodong has undertaken feasibility studies, at its own expense, on a number of council-suggested schemes.

Sheffield City Council said: “Unfortunately the schemes reviewed to-date have not met the investor’s viability requirements for investment.”

Councillor Mazher Iqbal, Cabinet Member for Business and Investment at Sheffield City Council, added: “I would like to thank Sichuan Guodong for its strong enthusiasm and affection for Sheffield, strengthened by their own family ties here.

“I remain hopeful that Sheffield and Guodong can work together in the future. There are a large number of private sector schemes in Sheffield that Sichuan Guodong may wish to collaborate on and we will be happy to inform and advise them if them if any interest arises.

“We are now in a much stronger place in our relationship with China and understand better how Sheffield can work with Chinese investors on a range of business opportunities.

“I would like to sincerely thank Mr Wang and his team for the interest they have shown in the city. We have so many ties with China and these can only strengthen and lead to jobs and economic good fortune here in Sheffield.”

Lord Scriven, former leader of Sheffield City Council, reacted on twitter stating “this “deal ” has been a scam from start to finish,” adding that it was vanity project and that “the £1bn Chinese investment deal was not worth the paper it was written on.”

Sheffield City Council has now written to the chairman of Sichuan Guodong to inform them “that the door to future business in the city remains open” – despite the lack of progress on his proposals.

Meanwhile, the council added it was “very confident” of strengthening its ties with China and taking forward other plans with other partners.

The council added that Sichuan Guodong had also been “caught up” in increased restricts made by Chinese Central Government policy which resulted in stricter investment criteria being applied to Chinese private companies wanting to invest in real estate projects outside mainland China.

The council added: “Both parties acknowledge that significant amounts of pre-development work has been undertaken and that although this has not delivered the results that had been hoped for, Guodong remain open to working on future projects in Sheffield if the right investment opportunities can be found.”