Contents

Introduction

Most Latin American nations are set to have a better year in 2018 in terms of economic growth after the last few years characterized by weak commodity prices and, in a number of countries, corruption scandals and their political fallout, which undermined investor confidence.

The IMF's latest forecast predicts regional GDP will grow 2.0% this year versus 1.3% in 2017. The main drivers will be the recovery in commodities, stronger external demand and better financing conditions. This last element will be critical in helping governments and private sector alike push forth on infrastructure projects.

Quality infrastructure is a dual driver of growth thanks to the spending on the projects themselves - indeed, countries including Brazil and Argentina launched massive infrastructure programs precisely when their economies were suffering most - as well as the further economic activity that better infrastructure can support.

In that sense the sector will continue to have a vital role to play in Latin America's development this year and beyond. The multi-billion-dollar gaps apparent in most Latin American nations mean there is plenty of room for more projects.

BNamericas' project profile database shows there are nearly 400 infrastructure and water projects now under construction across the region plus another 603 active projects at pre-construction stages, including 172 awaiting a construction decision and 99 in the tendering phase.

Also read: Infrastructure Outlook 2018: Highways, Metros Lead Optimistic Investment Plans

But challenges remain. The percentage of respondents to BNamericas' 2018 Infrastructure Survey who said corruption will present an obstacle to doing business in the year ahead was 94%, up from 81% in the 2017 survey. The countries that registered the greatest increases were Argentina, Colombia and Peru.

As recently as our 2017 survey, the responses of which were gathered in late 2016, the idea that corruption would be the main obstacle to developing projects received little attention, with less than 5% of respondents saying so. The main response by far in last year's survey was "lack of government planning and support," while "lack of finance" came in second. In the 2018 survey, corruption was seen as the primary obstacle to development by the largest chunk of respondents, at 30%.

Not only was 2017 an ugly year for some countries in terms of corruption scandals, but a number of governments advanced on creating or improving their PPP frameworks to support infrastructure investment.

Also read: Infrastructure Survey 2018

[GRAFICO:FIGURA:ID_4723]

[GRAFICO:FIGURA:ID_4725]

Significant variety is apparent in investment plans. For example, Brazil's big engineering and construction firms have all been impacted by corruption scandals and the recession Brazil went through 2015-16. New project awards stagnated and the implicated companies had projects cancelled and racked up debt, and a main focus for most of them in 2018 will be reducing and restructuring this debt, and not on capital spending.

There is a conspicuous lack of early-stage projects in the companies' portfolios. BNamericas contacted all five of the large Brazilian firms profiled in this report in an effort to obtain data on spending plans and strategies, with limited success.

The effects have ricocheted around the entire region, as the companies, and Odebrecht in particular, had infrastructure projects in numerous Latin American countries. The political fallout has also been heavy in Peru -leading even to the resignation of the president-, Ecuador and Colombia.

The situation has opened the door to other players who, combined with today's better access to financing, are planning increased spending in 2018, such as Grupo Argos and Grupo Carso, while Acciona will spend at similar levels as last year.

The following report aims to outline the future spending of the region's most relevant builders of infrastructure projects, as well as to provide information on their 2017 financial results and serve as a reference as to their key construction and pre-construction stage projects in Latin America.

Some of the projects in the lists of key projects are only partly operated by the companies to which they are attributed, either because the company forms part of a consortium or because it is carrying out a specific part of the overall project. For this reason, certain projects may also be listed under more than one company.

Project Risk Analytics
Tracking project performance

Portada Risk

By providing a top-down analysis of the timeliness and costs of current Latin American projects, BNamericas provides a new tool to the industry, allowing it to learn from past events and improve planning for future projects.

  • Analytics report analyzing key statistics
  • Consider the risks of changes in project schedules
  • Instant view of project status
  • Benchmark your portfolios and new projects