Moody’s Investors Service says that the depreciation in the renminbi that has followed the shift in the mechanism for determining the daily fixing rate of the Chinese currency against the dollar is credit negative for Chinese property developers, given their significant exposure to foreign-currency debt, the majority of which is denominated in USD. “Nevertheless, all else being equal, we believe that the majority of our rated developers could withstand up to a 10% depreciation of the RMB relative to foreign currencies without it impacting their credit ratings,” says Simon Wong, a Moody’s Associate Managing Director. Wong was speaking on the release of a new Moody’s report on China’s property sector, entitled, Rated Developers Have Headroom to Withstand Modest RMB Depreciation. The report follows the People’s Bank of China announcement on 11 August that it would start basing the fixing rate of the renminbi against the dollar on the previous day’s market prices. “Furthermore, it is possible that other factors could counterbalance the impact of an RMB depreciation, including the potential for further declines in domestic interest rates and the ongoing opening up of the domestic bond market as a funding avenue,” says Wong. At end-2014, an average 35.5% of the debt structures of the 43 rated developers analysed in the new Moody’s report comprised foreign currency-denominated debt — including offshore bonds and bank loans — and this foreign-currency risk is largely unhedged. “Because of the mismatch between their foreign-currency debt obligations and RMB-denominated revenue and operating cash flow, their interest expenses and the principal amounts of foreign-currency debt will increase in tandem with a depreciating renminbi,” adds Wong. Moreover, the 14 rated developers with the largest percentages of foreign-currency debt relative to total reported debt would see their leverage, as measured by revenue-to-debt or debt-to-capitalization, weaken under a 10% depreciation scenario against the US dollar. This 10% depreciation sensitivity analysis is for testing the rated developers’ resilience to a higher-than-expected renminbi depreciation, which is not our core scenario or expectation. Moody’s believes that high investment grade developers — such as China Overseas Land & Investment Limited (COLI, Baa1 stable) and China Resources Land Limited (CR land, Baa1 stable), despite being amongst those with the highest exposure to foreign-currency debt — are less impacted due to their strong financial buffers and state-owned enterprise status or affiliation. In addition, Moody’s notes that the foreign-currency bonds of property developers coming due through 2016 are relatively small in amount, thereby limiting the near-term impact on liquidity due to currency depreciation. But, with the bonds maturing in the next 12 months, refinancing risk remains very high for Glorious Property Holdings Limited (Caa3 negative) and Renhe Commercial Holdings Company Limited (Caa1 negative). At the same time, such risk has already been factored into their low ratings. Furthermore, in Moody’s view, the foreign-currency exposures of rated Chinese developer have likely peaked and will decline over the next one to two years as developers increase usage of the onshore bond market. In this context, Moody’s notes that the opening up of the domestic bond market to property developers provides rated companies with an alternative source of long-term funding that is not exposed to foreign-exchange risk. Some RMB78.9 billion (US$12.3 billion) of domestic bonds have been issued so far in 2015. In contrast, offshore bond issuance over the same period declined by 54% to US$8.4 billion.

Jim will lead the government-owned company which is responsible for delivering £11 billion of improvements to England’s motorways and major A roads by 2020. Jim is an experienced engineer who will bring significant leadership experience to this key role. Jim has a broad range of experience working on safety critical transport projects, in the utilities industries and in world renowned businesses including British Airways and Heathrow Airport Holdings. Jim will take over the chief executive post from Graham Dalton who announced his departure in January after 7 years leading Highways England predecessor the Highways Agency. Highways England Chairman Colin Matthews said: I am delighted to announce Jim’s appointment to lead Highways England in a new, challenging era. The government has committed to the biggest investment in roads in a generation: there are more than 100 roads schemes in its Road Investment Strategy which Highways England will be responsible for delivering to provide safer, more reliable and much improved journeys on our busiest roads. I would like to thank Graham Dalton for his leadership over the past 7 years. He has been responsible for significant improvement schemes, as well as meeting the needs of the nation during severe weather and events of international interest such as the 2012 Olympics, all culminating in the successful transition from the Highways Agency to Highways England. Secretary of State for Transport Patrick McLoughlin said: Jim’s experience of leading world-class infrastructure companies means I can be confident he will ensure that the benefits of the record investment this government is making in our roads delivers for drivers and businesses across the whole of the UK on time and on budget. Jim will join on Monday 22 June 2015, before formally taking over from Graham Dalton on Wednesday 1 July 2015. As Managing Director of the Airports Division at Heathrow Airport Holdings (BAA) between October 2012 and December 2014, Jim was responsible for all the group’s airports outside Heathrow. He was previously Managing Director at Edinburgh Airport, and Technical Standards and Assurance Director at Heathrow Airport Holdings (BAA); he spent 4 years at Central Networks (Eon UK) as Capital Delivery and Field Force Director, and he worked for British Airways for 14 years between 1988 and 2002, serving some of that time as Chief Engineer for Concorde and as Technical Director for the airline.

Unite has called on the Scottish Government to look into the union’s allegation that local workers are being shut out of employment opportunities at Viridor’s new £177m energy-from-waste (EfW) plant in East Lothian. Unite has written to environment secretary Richard Lochhead seeking talks over claims that national employment agreements for the industry have been ignored and local workers have been excluded from accessing 250-300 skilled jobs at the Oxwellmains facility in Dunbar. In response, Viridor told MRW that its main contractor will maximise local employment, has made two major awards to Scottish sub-contractors and brought in locally sourced materials. In a statement, Unite alleged significant recruitment of labour from the continent and the undercutting of the National Agreement for the Engineering Construction Industry, which sets terms and conditions for hourly-paid workers on major projects. Unite national officer Bernard McAulay said: “We want the Government to bring all parties to the table and ensure Viridor and its sub-contractors sign up to our national trade agreement or a specific project agreement.” According to McAulay, payment issues have become a major concern for the union, with contractors at other EfW project sites paying foreign workers the equivalent of €8 (£5.65) per hour compared with the estimated €21 (£14.80) per hour under the agreement. Viridor confirmed that Unite had made contact to request a meeting on 6 August, the same day the union issued its public statement. A spokesman said: “Viridor’s £177m merchant investment at Dunbar, East Lothian, is part of £357m invested in next generation Scottish recycling and green energy infrastructure in the past 18 months alone. This investment is vital to translating Scottish zero waste policy into practice, helping councils, companies and communities become cleaner and greener. “In addition to already working with East Lothian Council’s economic development team, established programmes such as our partnership with the Engineering Development Trust are already in place to maximise skilled and professional opportunities for young people. “The contractor announced its intention to maximise local employment and supply chain opportunities in July via a series of recruitment and ‘meet the buyer’ events, and it looks forward to confirming dates shortly. Indeed, it has made two major subcontract awards to Scottish companies, Fairhurst consulting engineers and Land Engineering, with stone for the earthworks being sourced from within East Lothian.” Earlier this month Suez UK rejected Unite allegations that the company and its construction partner Sembcorp failed to recognise the same agreement for workers building an EfW plant on Teesside. The body responsible for the national agreement, the Engineering Construction Industry Association, declined to comment.

DF has announced preferred bidders for Hinkley Point C, with the contracts for larger components likely to go to French firms. How could UK industry participate more on future nuclear projects? Last week’s poll can only be described as deeply inconclusive. Despite a reasonably strong response, with 772 readers completing the poll, by far the largest group, almost 70 per cent, voted for none of the options we had suggested; and although we deliberately ask people who have chosen the ‘None of the above’ response to explain their choice in comments, only one of the 528 indecisive respondents did so, which makes it impossible to draw any conclusions. The helpful respondent said that he thought UK firms should have nothing to do with nuclear new-build until all of the waste from pevious generations of reactors had been safeky disposed of, although hew didn’t add any thoughts on how this could be achieved to his satisfaction. Although it is of course possible that his feelings were shared by the other 527, it seems unlikely in the light of previous polls and articles on UK nuclear, so we simply cannot say what other options we should have included to get a more conclusive response (it might be worthwhile to say that we can only give a maximum of six options in our online polls). Of the 244 respondents who did pick one of our suggested options, the largest group, 15 per cent, said that future UK nuclear should follow the pattern of previous reactor generations, using technology developed in the UK to draw on a British supply chain. Two options tied on 7 per cent: the renationalisation of the energy sector to ensure that UK companies benefit; and that the government should ensure that main contracts are placed with UK forms. A further 2 per cent noted that UK forging capacity needs to be expanded so that it can handle the large steel components neeeded for nuclear installations. Read more: http://www.theengineer.co.uk/civil/news/last-weeks-poll-ensuring-uk-involvement-in-nuclear/1020833.article#ixzz3jLoPZwrJ

Legal & General has ploughed £162m into a major regeneration project in Leeds, the first to be delivered as a result of the institutional investor’s partnership with the government’s Regeneration Investment Organisation (RIO).

A Balfour Beatty worker killed while working on the M3 in Surrey has been named by police as 28-year old Ben Collins.

Consultancy heavyweights CH2M Hill and Atkins have teamed up as a joint venture to bid to become the engineering delivery partner for HS2.

NG Bailey grew its underlying profit by 43 per cent during 2013/14, despite continuing to shrink its building construction business.