WORLDNEWS
8
BRAZIL
Forceddivestments
as punishment for
cement cartel
Anti-trust regulator to compell fourmajor
materials producers to divest assets and pay
fines of US$1.4 billion.
B
razil’s anti-trust regulator, Conselho Administrativo de Defesa
Econômica (CADE), is to force the sale of 24% of the total installed
capacity of the country’s four largest cement manufacturers. In
addition, it has imposed financial penalties totalling BRL 3.1 billion (US$
1.4billion) as punishment for cartel activities.
The four companies involved are Votorantim, InterCement (which
was formed by the merger of Camargo Corrêa and Cimpor), Itabira and
Holcim. Lafarge previously settledwithCADE byway of an agreement on
divestments, and negotiated a BRL 43million (US$ 19million) fine.
Votorantim will be the most affected by the forced divestments. It will
have to sell 35% of its production capacity, whichCADE says is equivalent
to some 15% of the Brazilian cementmarket.
InterCement, meanwhile, will have to sell 25% of its capacity, which is
equivalent to 4% of the market, while Itabira’s sale of 22% of its assets is
put at 3%of themarket. Finally,HolcimBrazil’s forceddivestment of 22%
of its cement assets in the country equates to 2% of themarket.
According to CADE, there has been a cement cartel active in Brazil for
the last ten years, which has seen companies collude to fix prices and sales
volumes, and create barriers to competition.The agency estimates this cost
the economy BRL 14 billion (US$ 6.3 billion) in inflated prices and other
effects.
RUSSIA
TheRussian federal government is reported to have approved the
construction of the third runway ofMoscow’sDomodedovo airport, at a cost
of RUB 13 billion (US$ 366million). Market research firmPMR said that the
airport’smanagement had been seeking approval and funding for the project
formore than three years. One of the two existingDomodedovo runways is
in need of repair as it has not been overhauled in 20 years, the other runway
having been improved in 2007. Civil engineering company Transstroy, which
belongs to theRussian businessmanOlegDeripaska, is said to be interested
in the contract.
international
construction
may 2014
CHINA
US$600
million for
infrastructure
The World Bank has approved
loans totalling US$ 600 million
to support upgrades to public
transport services in two major
cities in China’s northeastern
Heilongjiang Province.
The funds will also be used to
expand railway capacity along a key
transport corridor inHeilongjiang,
as well as the development of
increased gas usage in Shanxi
Province.
Harbin and Mudanjiang in
Heilongjiang Province are set to
benefit from theHeilongjiangCold
Weather Smart Public Transport
System Project, which will be
financed inpart with a loan ofUS$
200million.
This project aims to improve
pavement conditions, install bus
stops, provide heated indoor
bus waiting facilities, construct
passenger
hubs,
terminals,
bus depots, and facilities for
maintenance.
Meanwhile, the HaJia Railway
Project, also in Heilongjiang
Province, will be boosted by a
US$ 300 million loan. This will
support a construction of a 343 km
double-track, electrified, mixed-use
(passenger and freight) railway line
between the cities of Harbin and
Jiamusi.
The
project
will
include
construction of twelve new stations
and upgrading of the existing
Jiamusi station.
Planned for completion in 2019,
the World Bank said the new line
would reduce the rail distance for
passengers aswell as freightbetween
Harbin and Jiamusi by about 164
km – from the existing 507 km to
343 km. The new passenger trains
on the line are planned to operate
at 200 km per hour.
Finally, theShanxiGasUtilization
Project will be supported by a
US$ 100 million loan. The World
Bank said that these funds would
support investments in gas-fired
combined heat and power plants,
in addition to the expansion of the
gas distributionnetwork in selected
counties in Shanxi Province.
RUSSIA
Market
slowdown to
continue
The Russian construction industry’s
slowdown looks set to continue,
according to findings frommarket
researchfirmPMR.
It said Russian construction
output contracted by -1.5% year-
on-year in 2013, in contrast with
the +2.4% expansion achieved a
year before.
PMR
reported
that
civil
engineering construction output
was projected to post a marginal
decline (-0.2%) in 2014, after a
-4.1% contraction in 2013.
PMR attributed the slowdown
to poor performance in the civil
engineering construction sector, as
new developments continued to be
postponed.
A large share of civil engineering
construction output is generated by
state-fundedtransportinfrastructure
construction projects, as well as by
incentives rolled out by companies
in the oil and gas, andmining and
metallurgical sectors. According to
PMR, in 2013, RUB 596 billion
(US$ 19.4 billion) was disbursed
to support the implementation of
the 2010 to 2020Transport System
Development Programme, which
was -0.1% less than the amount
allocated in 2012.
Meanwhile,
a
programme
published by the Ministry of
Economy in the third quarter of
last year forecasting the social and
economic development of the
Russian Federation during the
period 2014 to 2016, envisages
its spending 2.5% of GDP on
transport infrastructure in 2013.
This figure is to remain unchanged
in this year and in 2015, and to be
reduced to 2.4% in 2016, PMR
said.
However, it is not all bad news.
Russia’s residential construction
sector saw the number of new
homes completed in 2013 increase
by+10.3%year-on-year to912,100,
the largest amount in more than
20 years. In terms of floor space
put into use in 2013, there was an
increase of +5.6% to +69.4million
m² – again the highest figure since
1989.
