international
construction
january-february 2104
WORLD NEWS
INDIA
The World Bank has approved
a US$ 500 million credit for India’s
Rural Water Supply & Sanitation project
for low-income states. The credit
will fund improvements to the piped
water supply and sanitation services
through decentralised delivery systems
in the Indian states of Assam, Bihar,
Jharkhand and Uttar Pradesh. Currently,
less than a third of India’s rural
households have access to tap water
and domestic toilets. The project will be
implemented over a six-year period.
UKRAINE
Ukraine’s construction
industry is forecast for a -16% decline
year-on-year in 2013, marking it the
fifth consecutive quarter of negative
performance, according to research
company PMR. Last year’s expected
decrease follows a -8.3% drop in 2012.
Between 2008 and 2013 the Ukrainian
construction sector succeeded in
expanding year on year in real terms
only once – in 2011, when it posted
double-digit growth. At its lowest
point in 2009, the market saw a -40%
decline year-on-year.
BRAZIL
The Inter-American
Development Bank has approved a
US$ 480 million loan to support the
rehabilitation of 570 km of highways in
the state of São Paulo, Brazil. Improved
access facilities will be built, together
with the construction and paving of
extra lanes and signage upgrades. The
São Paulo Department of Highways will
implement the programme.
EUROPE
The European Commission
has called for proposals worth
€
350
million (US$ 477 million) to finance
European transport infrastructure
(TEN-T), for projects in all EU Member
States and for all types of transport.
These include air, rail, road, maritime
and inland waterways.Funds are
traditionally awarded to the highest
priorities of the TEN-T network.
AFRICA
Connectivity of the 9,022 km
Trans-Sahara Highway (TSH) linking
several African countries has been
boosted following a US$ 185 million
loan from the African Development
Bank (AfDB). The funds will be used to
support construction and asphalting of
565 km of roads linking the main axis
and the Chadian branch of the TSH,
including a 543 m bridge on the River
Niger at Farié.
HIGHLIGHTS
PANAMA
Cost over-runs on
canal expansion
A dispute has arisen between the Panama Canal
Authority and he contracting consortium over
US$ 1.6 billion in cost overruns.
G
rupo Unidos por el Canal (GUPC), the consortium working on the
expansion of the Panama Canal, threatened to suspend work on the
scheme at the end of December in a dispute oveer payment of US$
1.6 billion in cost overruns. After several different proposals, the Panama
Canal Authority (ACP), the Panamanian government’s client body for the
project, was considering a plan to co-finance the overruns with GUPC, as
iC
went to press.
Details of how the cost over-runs might be financed between GUPC and
ACP were not released. However, the proposal appears to have unblocked
the stalemate between the two parties.
After initially rejecting the consortium’s demand and claiming it has no
legal basis to halt construction, the PCA had previously proposed a US$ 283
million funding package. In response, GUPC requested an advance of US$
400 million. It added that it was committed to completing the work, and
that the two sides had entered arbitration proceedings to resolve the issue.
The cost overruns stem from extra work required on the project due to
unexpected ground conditions. The nature of the problem and the costs
associated with them are not in dispute, the question is which party is liable
to pay them.
The issue flared-up on December 30 when GUPC issued an ultimatum,
saying it would suspend work in 21 days (January 20) unless the ACP paid
the additional costs. The issue is currently under review by an international
arbitration panel, and GUPC did not subsequently suspend work as
threatened.
GUPC comprises four contractors – Sacyr of Spain, Salini Impregilo of
Italy, Jan De Nul of Belgium and Constructora Urbana of Panama.
6
Global demand for construction
aggregates is set to reach 53.3
billion tonnes by 2017, according
to research company Freedonia.
Growth is expected to average
+5.8% per year between 2012
and 2017, with the most robust
increases coming from emerging
markets in Africa, Asia and the
Middle East.
The company said China would
account for more than half of the
new demand that will be seen over
the five-year period. However,
growth in India, the second largest
market in Asia, will be faster, as
the Chinese market matures and
decelerates from the high growth
levels seen in the 2000s.
These factors will contribute to
annual average growth in aggregates
demand of +6.2% in the region
between 2012 and 2017. The
volume of aggregates sold in Asia
is expected to rise to 36.5 billion
tonnes per year by 2017 – almost
70% of the global total - compared
to just 17.4 billion tonnes in 2007.
North America will be more
subdued, at an average of +4.2%
between 2012 and 2017. This is
expected to take demand to 3.75
billion tonnes of aggregates per year
by 2017.
The downturn between 2007 and
2012 means in volume terms, the
market in 2017 will be about level
with 2007.
Western Europe is expected to see
the weakest growth between 2012
and 2017, at an annual average rate
of +3.3%. The volume of aggregates
sales in the region is expected to hit
3 billion tonnes by 2017, still 275
million tonnes less than in 2007.
Other regions of the world are
forecast to account for some 9.95
billion tonnes of aggregates demand
by 2017, following average annual
growth of +5.7% between 2012 and
2017.
In terms of individual countries,
Freedonia sais that Spain, Russia,
the US and Italy were expected to
perform particularly well, due to
pent-up demand for aggregates in
these markets.
GLOBAL
Emerging market aggregates demand
