...that opportunities for international firms will become increasingly difficult to get. “Political importance of supporting and preferring local companies, especially at state-financed projects during tough times,” may become a problem, says Ilicak.
Increasing national debt loads among major countries, particularly in Europe and the U.S., may stifle some public infrastructure spending, which is another concern. Public-sector cuts will be widespread, “but there will be a shift in government spending into public-private-partnership [P3] spending,” says Lütkestratkötter. He is bullish about growth prospects of private-sector construction investment in Asia, fuelled by an emerging middle class. He also predicts increasing opportunities in the concession/P3 markets “in a few years.”
P3 financing conditions are improving, but they are still “nothing like they were three years ago,” says Michel Cote, deputy CEO of France’s Bouygues Construction SA. The lack of long-term debt continues to hurt, he says.
Bouygues has started design of the Miami Tunnel project, procured under a P3. “We are not … considering new P3s in the States,” says Cote. “We have found it was easier for us to bid in Canada.” Canadian P3s are structured like those in U.K., which are familiar to the French.
P3 prospects in the U.K., one of the biggest markets, “will continue, but we expect to see cuts,” says Johan Karlström, CEO of Sweden’s Skanska AB. But the firm recently has closed major deals in Europe and plans to seal a $300 million highway P3 in northern Chile this year. “We see several projects in Latin America,” he says.
Germany was “a latecomer” to P3 procurement, but “there is a constant deal flow,” says Lütkestratkötter. The U.S. is behind even Germany, but remains potentially attractive to Hochtief. The firm has a North America team tracking P3s, but its main focus is Canada.
Hochtief has interests in two P3s to upgrade existing toll highways in Greece, where construction has been slowed by the economic crisis. But the government has met its financial commitments to the deals, says Lütkestratkötter.
| ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||||||||||||||||||
|
Asian Intrigue
Asia may be the biggest regional construction market in the world, but many international contractors are finding it tough. “The Asian market is booming again, specifically Hong Kong and even Singapore and South Korea,” says Cote. Bouygues recently won contracts for two tunnels and a ship terminal in Hong Kong.
With “huge infrastructure plans,” Hong Kong will be a “very strong market,” adds Ian Tyler, chief executive officer of the U.K.-based Balfour Beatty Group. Lütkestratkötter agrees,...
Post a comment to this article
Report Abusive Comment