Chancellor of the Exchequer, Rt Hon George Osborne MP has called for more investment by Asian companies in UK infrastructure, citing Cheung Kong Group, owners of Northumbrian Water, as the example.

In October 2011 UK Water (2011) Limited, which is indirectly wholly-owned by a consortium of Cheung Kong Infrastructure Holdings Limited, Cheung Kong (Holdings) Limited and Li Ka Shing Foundation Limited completed the acquisition of Northumbrian Water Group for a cash consideration of around £2.4 billion.

The comments came in a speech George Osborne has just made to the Asia Financial Forum in Hong Kong. Further visits scheduled on the Asia trip include Beijing and Tokyo.  

The Chancellor said it was no surprise or coincidence that his first trip abroad in 2012 should be to Asia, which reflected a deliberate, conscious effort by the British Government to deepen Britain’s partnership with Asia. Britain would build on its position as the home of Asian investment and Asian finance in Europe and would take steps to ensure the UK was “bold enough to do what it takes to make that happen.”

He commented:  

“We have got to do more if we are to be the home of Asian investment in Europe. The British Government needs to roll up its sleeves and make it happen.”  

As well promoting British investment in Asia, the Government is now actively seeking Asian investment in Britain and its infrastructure. George Osborne continued:  

“Here and in Beijing I will be promoting infrastructure as just one of the opportunities the UK brings for Chinese investors, following the lead taken by Hong Kong’s own Cheung Kong Group, the largest overseas owner of UK infrastructure.”   

However, he emphasised that the Asian partnership was not a substitute for the close working relationship with the European Union and North America.  

China is the world’s second largest manufacturing exporter in the world, while the UK is the world’s second largest services exporter. The UK is now the largest source of foreign direct investment to China from within the whole EU and UK goods exports to China rose by 20% last year, and 40% the year before that. UK goods exported to Hong Kong also rose by 19%  

In the autumn Thames Water said it would be looking for bids from contractors as far afield as China or Singapore when the Thames Tunnel project is put out to tender - possibly in joint venture with a partner.

Recent months have seen a rising level of interest from overseas investors in the UK water sector, including the acquisition of a 70% stake in Bristol Water by Canada-based Capstone Infrastructure Corporation and the sale by Macquarie of a 9.9% stake in Thames Water to Abu Dhabi Investment Authority.

Last month French utility giant Veolia announced it was putting its three UK-regulated water companies up for sale as part of its effort to reduce net debt from €15bn to less than €12bn by the end of 2013.