Sturgeon under fire over £10bn Chinese investment

5 Apr 16

First minister Nicola Sturgeon is coming under mounting pressure in the Holyrood election campaign over a £10bn outline investment deal she signed with a Chinese consortium, after corruption allegations surfaced against one of the major corporations involved.

Sturgeon signed a memorandum of understanding with the Chinese delegation at Bute House, her official Edinburgh residence, on 21 March, three days before the Holyrood Parliament was dissolved for the election, but no announcement was made about the deal until after details had been published online by one of the Chinese signatories.

On Sunday, the Scottish Government published the memorandum, accompanied by a statement insisting that the first minister was glad to see it made public, and that it only amounted to an undertaking to hold exploratory talks about potential infrastructure investments in railways, renewable energy and affordable housing. No explanation was offered for the delay in publication.

But the Herald newspaper today reports that China Railway Group Ltd (CRG), whose subsidiary, China Railway No 3 Engineering Group, was one of the two main construction industry signatories to the deal, had been dropped by Norway’s oil fund after a report by the country’s ethics council found it presented an “unacceptable future risk of corruption”.

The allegations centre on multi-million pound bribes said to have been paid to Chinese civil servants by CRG in respect of railway and housing contracts. The other Chinese corporation involved in the deal, SinoFortone, is involved in a portfolio of international investment ventures, including London’s Crossrail 2 project and the London Paramount theme park.

Scottish Liberal Democrat leader Willie Rennie said the agreement raised questions about the extent to which the Scottish Government had carried out due diligence inquiries into its potential Chinese partners, while Labour’s Jackie Baillie demanded assurances that the investments would not see cheap Chinese steel imported to Scotland at further risk to UK steel plants.

  • Keith Aitken
    Keith Aitken

    covers Scottish affairs for Public Finance from Edinburgh. He was formerly economics editor and chief leader writer on The Scotsman and now has a busy freelance career as a writer, broadcaster and event chair.

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