83
Turning a new leaf
Many iconic buildings have sprung up in Macau in recent years,
kicking off a silent revolution in the local construction industry.
After several years of phenomenal growth, the industry is now
at a crossroads and an up-and-coming executive is charged
with the duty to lead the industry down the right path
by Alan Tso
E
xperience is a prized asset in the busi- today,” he suggests.
ness world, but not a key factor to success. The soft-spoken entrepreneur is trying to help
“Our world is changing everyday. Experience small local contractors come to grips with the es-
alone won’t prepare us to cope with unexpected cir- sentials of building contracts. One of his first goals
cumstances,” says Timothy L.T. Cheong, managing is to promote the use of Chinese language and sim-
director of San You Development. ple terms in drafting contracts, since small firms
Cheong cut his teeth in the finance sector, ad- may not have adequate resources to hire legal ex-
vising on legal and financial matters for several perts and translators. Cheong points out, “For small
major infrastructure projects in Macau in the early contractors who undertake subcontracting work, a
90s. But since founding his own company with sev- clear and easy to understand contract is particularly
eral partners in 1997, the 40-year-old has made his crucial because it is their best safeguard in case the
mark in the construction and property sector. And main contractor delays or defaults on payments.” In
recently he has been elected president of the Con- the current economic turmoil, which is essentially
struction Machinery Engineering Association of a credit crunch, delays and defaults are not uncom-
Macau – becoming one of the youngest presidents mon.
in the association’s 16-year history.
As Cheong himself puts it, he may lack front- Second fiddle
line experience in construction, yet he is determined
to bring a breath of fresh air to the industry as the Cheong was sad to see many local contractors
new president of the association. miss out on the opportunities during the construc-
tion boom several years back when Macau was vir-
Embracing change tually a giant building site. During this period, the
construction sector expanded at breakneck speed,
After several years of white hot growth in the and there was an influx of foreign investors who
wake of gaming liberalisation, the construction sec- brought with them abundant capital and expertise.
tor is cooling off as a result of the global financial “Opportunities were everywhere back then. How-
meltdown. In Cheong’s opinion, the industry is now ever, many local contractors found it hard to adapt
standing at a crossroads and needs to re-examine to the changes brought about by the unprecedented
itself to chart its future direction. “Both the nature growth, and many of them had reservations about
and scope of business have changed in the local the greater risks involved in those mega casino re-
construction sector since the gaming boom, which sort projects. As a result, many local veteran builders
has introduced mega projects to Macau. So we can chose to become sub-contractors of these projects
no longer do things by the old ways or just follow rather than main contractors even if it meant less
our local conventions. Rather we must fall in line profits for them,” Cheong remarks.
with international practices to remain competitive,” To be fair, few local contractors have never
he notes. complained about the dominance of foreign con-
By this, Cheong is referring to project man- tractors in Macau’s mega projects over the past few
agement and contracting. He explains that as most years since they have been able to make more mon-
local construction projects in the past were small- ey as sub-contractors of these big projects than as
scale and the local business community was closely main contractors of small projects in the past. But
knit, the relationship between the developer and the in Cheong’s opinion, this is not the healthy way for-
contractor was based more on trust than a building ward for Macau’s construction industry. “If none of
agreement. “But these days we are seeing bigger the major players in the construction industry are lo-
and bigger projects in Macau, which implies great- cally based, this will be bad for the economy. As we
er costs and greater risks. That’s why trust cannot know, many foreign contractors are here in Macau
suffice and building contracts are very important on a project by project basis. Once their projects
february 2009
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