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Chile Infrastructure Report Q1 2011
Business Monitor International, Jan 2011, Pages: 81
The Chile Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Chile's infrastructure industry.
Chile has weathered the difficulties thrust upon its infrastructure sector by the devastating earthquake in early 2010 and is now preparing for renewed construction sector growth from 2011 onwards. Forecasts have been revised down however following weaker than expected performance for the first three quarters of 2010. Construction industry value is expected to rise to US$19.3bn in 2011, a year -on-year (y-o-y) rise of 2.65%. Over the forecast period the country’s strong fiscal position is expected to continue to drive infrastructure development with average y-o-y growth of 3.3% until 2015 when the industry will be valued at US$25.9bn.
In the third quarter of 2010, the Chilean government announced a slew of new tenders for a road infrastructure development. In October bids worth a combined US$860mn for three highway concession projects – Chile Highway 5, improvements to Ruta 148 El Pino-Concepción and improved access to the Diego Aracena Airport. Two additional projects were announced for 2011 with an associated budget of US$223mn,
In November 2010 development of ,the Costanera Espigon port terminal moved ahead with Empresa Portuaria San Antonio (EPSA), Chile's state-owned port administrator, announcing a deadline of March 31 2011 for the submission of bids for the concession, according to BN Americas,. The concession will need estimated investment of US$180mn for infrastructure and US$102mn for technology. The contract will be granted in Q411 and construction work is expected to be completed during the first four years of the concession.
Following upon data showing Chilean real GDP expanded 6.5% in Q210, it is believed the economy's current economic cycle is approaching its peak. Private consumption and gross fixed capital formation will remain key drivers of growth, with the latter in particular set to be buoyed by large-scale infrastructure projects. Net exports will remain a key drag on growth, with a weakening external environment potentially constraining the country's export sector.
BMI expects gross fixed capital formation (GFCF) to sustain relatively strong rates of economic growth over the coming quarters. This in large part derives from the bullish outlook for the infrastructure sector. Chile made it into the top 10 infrastructure markets in the world in BMI’s recent rankings. This was on account of a favourable public-private partnership model, in addition to the fact that many major concessions are set to come to the market in the near term. As many of these projects are centred around the development of the country's transportation and energy infrastructure networks, GFCF will undoubtedly play a large role in bolstering the domestic economy going forward.
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