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English

Latam and the Caribbean have the greatest potential for new road concessions

GRI Barometer indicates that 70% of the companies are looking at the region

June 16, 2021

Prior to the opening of the 2nd GRI Global eSummit, GRI Club conducted a survey with sector leaders around the world to identify where the greatest opportunities are, the more relevant areas of focus and the main challenges and risks in a pandemic scenario. 

Over 80% of the 315 respondents said that the framework for long-term contracts between private investors and governments is good or regular in their region of operation, but improvements are needed. Only 15% are completely satisfied, and a small percentage (2.8%) indicates a bad situation where they invest or operate. 

How well-developed would you classify the framework for a long-term contract between private investors and governments for providing infrastructure assets and services in the road sector, in which the private partner will bear a significant amount of risk, management responsibilities and remuneration linked to performance in your region of operation?

Good, but some improvements are needed
 
 62,22%
 196 answers

Regular
 
 19,68%
 62 answers

Very good, it’s well-developed and attractive for investments
 
 15,23%
 48 answers

Bad
 
 2,85%
 9 answers

According to the key executives, the main challenges and risks at this moment are political or regulatory, with 60% of choices. The lower demand is pointed out soon thereafter (49%), followed by social issues completing the top three options (46%). On the other hand, insolvency (8%), design and construction (11%) and operation management (11%) were the least voted. See all the votes below. 

What are the main challenges and risks of investing in the road sector in a global pandemic scenario? (multiple choice)

Political or regulatory
 
 60,95%
 192 answers

Demand
 
 49,84%
 157 answers

Social issues
 
 46,66%
 147 answers

Changes in the legal framework
 
 40%
 126 answers

Financial or economic
 
 39,04%
 123 answers

Force majeure
 
 30,47%
 96 answers

Environmental
 
 24,12%
 76 answers

Project location
 
 13,65%
 43 answers

Operational Management
 
 11,74%
 37 answers

Design and Construction
 
 11,11%
 35 answers

Insolvency
 
 8,88%
 28 answers

GRI Barometer shows that companies are interested in Latin America and the Caribbean opportunities: 70% of the leaders indicate that these two regions have the greatest potential for new infrastructure projects in road concessions for the next 12 months. The number is even more relevant when considering that the second choice (USA & Canada) had 39% of votes. Asia-Pacific comes next, with 31%.

Considering a strong opportunity pipeline scenario, which markets worldwide do you think have the greatest potential for new infrastructure projects in road concessions for the next 12 months?

Latin America and the Caribbean
 
 70,47%
 222 answers

USA & Canada
 
 39,36%
 124 answers

Asia-Pacific
 
 31,74%
 100 answers

Western Europe
 
 10,47%
 33 answers

Eastern Europe
 
 9,2%
 29 answers

Middle East & North Africa
 
 8,88%
 28 answers

Sub Saharan Africa
 
 7,3%
 23 answers

Across the globe, companies are currently focusing on investments (60%), road maintenance/operation (46%) and advisory (41%). Largely debated nowadays, ESG implementation appears only in fourth place, with 24% of the votes. See all the options and respective percentages in the chart below. 

Which of the following will your company focus on? (Multiple choice)

Investments
 
 60,95%
 192 answers

Road maintenance & operation
 
 46,03%
 145 answers

Advisory
 
 41,9%
 132 answers

ESG implementation
 
 24,44%
 77 answers

Connectivity and Technology
 
 20,31%
 64 answers

Logistics and integration with other modes to move cargo
 
 13,96%
 44 answers

Safety and capability
 
 11,42%
 36 answers

Operator - Passenger Transportation
 
 6,03%
 19 answers

Operator - Cargo Transportation
 
 5,07%
 16 answers

Finally, the survey measured the willingness of leaders to invest in road assets - either local or international projects - in the next 6 months: 65% of them confirm that their companies are willing to take opportunities in the short-term, which indicates optimism about investments in the road sector. 

Are you willing to take future opportunities to invest in road assets - either local or overseas projects - in the short-term (next 6 months)?

Yes
 
 65,39%
 206 answers

No
 
 34,60%
 109 answers

 Por Henrique Cisman
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