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Though infrastructure development is often a boon for regional and national economies, in recent decades there has been a surprising lack of it among some of the world’s largest economies. Despite their status as economic powers, countries such as Germany and the US have neglected their infrastructure needs, much to their detriment. Accordingly, workers and goods alike have been forced to traverse crumbling, antiquated transport networks for years. Thankfully, however, in certain jurisdictions there is political will – as well as economic need – to improve networks and drive investment.

UNITED STATES

Dolly Mirchandani

White & Case LLP

“The last 12-18 months has been an exciting period of growth, with steadily increasing deal flow in the US infrastructure market – both greenfield project development as well as secondary market acquisition and disposal activity – and greater diversification of the asset classes in which private capital is deployed. The airport sector was given a real boost with the successful financial close of the $4bn Central Terminal Redevelopment project at LaGuardia Airport in New York which, being a terminal deal that did not need FAA approval, now provides a template for sorely needed terminal redevelopment projects across the country.”

PERU

Carlos Enrique Arata

Rubio Leguía Normand

“Unfortunately, the development of new infrastructure projects in Peru has almost completely stopped. Over the last 12 months, only two minor projects were awarded: the Aguaytia-Pucallpa 138kV Transmission Line and the Amazon Waterway. There have been several reasons for this stagnation. First, the mining sector has seen a decrease in activity over the last three years, due to lower mineral prices. Peru is primarily a mining country; consequently, our economy is largely shaped by its movement. When the mining industry suffers, almost all other sectors suffer as well.”

SPAIN

Joaquín Sales

King & Wood Mallesons

“Public investment and bidding processes in the infrastructure sector in Spain have been slow in recent months, due to budget shortages and political fragmentation. The construction and improvement of infrastructure projects is currently affected by forecasts of reductions in public spending. However, it is important to note that Spain still has one of the most modern and efficient transport networks in the world – our high-speed rail network being second to China only, and the largest in Europe at over 3000km long.”

GERMANY

Christoph Schauenburg

Luther Rechtsanwaltsgesellschaft mbH

“While Germany is still one of the world’s biggest exporters and is enjoying record low levels of unemployment, Europe’s largest economy has long suffered from a lack of investment in its infrastructure. Following reports of a partially insufficient and aging infrastructure, in August 2016 the German federal government adopted a plan to spend €270bn on construction and modernisation of the country’s infrastructure over the next 15 years. Our impression is that the mere announcement of the Federal Transport Infrastructure Plan has already led to an enhanced investment climate.”

ITALY

Alessandro Fusellato

Grant Thornton Consultants srl

“The last two years has been a key period for the infrastructure sector in Italy, both in terms of results and in the paradigm shift in infrastructure planning. The conclusion of three emblematic works for the country, Salerno-Reggio Calabria, the Variante di Valico and the AV Treviglio-Brescia railway, represent a period of change and a break with the past. The sector reform process is reviewing its priorities and consequently there have been changes to the regulatory framework governing the approval of the new Public Procurement Code and the issuance of the Guidelines for Investment Evaluation in Public Works of the Ministry of Infrastructure and Transport (MIT).”

JAPAN

Izumi Yamada

Deloitte Tohmatsu Financial Advisory LLC

“The Japanese government revised its national PPP/PFI action plan in 2017 to encourage more private participation in public services and assets through PPP/PFI schemes. The supervisory agency, the Cabinet Office (CAO), has also updated its numerical targets for 2013-2022 with expected projects valued at ¥21 trillion: ¥7 trillion for concession projects, ¥5 trillion for income-generating facilities, ¥4 trillion for public real estate utilisation facility and ¥5 trillion for other projects. The government also prioritised concession projects in six airports, six sewerage facilities, six water facilities and one toll road project between 2014 and 2016, as well as three education facilities, six public housing projects, three cruise ship terminals and six MICE facilities between 2017 and 2019.”

MALAYSIA

Kamilah Kasim

Rahmat Lim & Partners

“According to Goldman Sachs, Malaysia has the highest quality of infrastructure among the ASEAN countries. This is due to the commitment of the government to its comprehensive outline of government development policies and strategies, also referred to as the Malaysia Plan, to implement infrastructure projects. A key factor for the successful implementation of the country’s infrastructure projects is the adoption of public-private partnerships (PPPs) in the early 1980s. PPPs allowed the government to embark on many infrastructure projects by sharing the burden of funding the infrastructure projects with private sectors.”

MOZAMBIQUE

Paula Duarte Rocha

Henriques, Rocha & Associados, Sociedade De Advogados, LDA

“Over the last two years, Mozambique has experienced a reduction in foreign investment inflows. Low commodity prices, plus the withdrawal of funding by international donors due to hidden debts contracted by government, have slowed the country’s economy and growth. All these factors have contributed to a decrease in investment in the infrastructure sector and consequently affected investments and developments in the sector. Some of the projects that were under way have come to a halt and some of them recorded losses when the price of goods in the market increased significantly and purchasing power declined.”

ANGOLA

Catarina Levy Osório

ALC Advogados

“We have witnessed a minor yet consistent increase in infrastructure projects in Angola. The success of recent governmental efforts to finance infrastructure abroad has contributed to this overall improvement. For instance, the Angolan minister of finance recently announced an agreement with the Chinese government for a loan of $7.8bn which will be channelled to the promotion of nearly 40 projects of public works. On a similar note, the ‘bonds project’ has recently been founded between the Angolan Capital Markets Commission and three financial institutions. The project is meant to finance the construction of basic infrastructure around the country in energy, water, sewage and transportation.”

CONTRIBUTORS

ALC Advogados

Deloitte Tohmatsu Financial Advisory LLC

Grant Thornton Consultants srl

Henriques, Rocha & Associados, Sociedade De Advogados, LDA

King & Wood Mallesons

Luther Rechtsanwaltsgesellschaft mbH

Rahmat Lim & Partners

Rubio Leguía Normand

White & Case LLP