Greece Infrastructure Report Q3 2012
Business Monitor International, June 2012, Pages: 76
The Greece Infrastructure Report provides industry professionals and strategists, corporate analysts, infrastructure associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Greece's infrastructure industry.
BMI View: Ongoing economic pressures, investors’ caution and government austerity drive will act as the main impediments for recovery in the Greek construction industry. Our core scenario envisages a sixth consecutive year of contraction in the industry in 2012 and little prospects for a recovery until 2015.
However, there a handful of infrastructure projects - mainly coming from EU funding - that could offer some upside risks to our outlook.
A major factor holding back the recovery in the infrastructure sector is its reliance on public funds. Local news sources report that nearly 50% of the funds earmarked for the construction industry for the first four months of 2012 have been withheld from the market. In the residential and non-residential segment, higher property taxes, tight credit and rising unemployment led to a 9.3% year-on-year (y-o-y) contraction in property prices in Q112, (according to estimates from the Bank of Greece), falling faster than the 2011 quarterly average decline of 5.3% y-o-y. This all-round pessimism has prompted BMI to stick to its forecast of a 9.4% y-o-y contraction in the construction industry value in 2012. Beyond 2012, we expect the industry value to continue declining until 2014 and begin recovering in 2015, when minimal growth of 1.0% is anticipated.
Key developments in the sector include:
- Given that privatisation programme plays an integral part in Greece’s EU-IMF sponsored bailout package, we expect Greece to continue to push ahead with its privatisation programme. In May 2012, the government was reportedly looking to transfer 25% of Athens International Airport, 80% of the Hellenic Vehicle Industry (ELVO) and shares of Piraeus and Thessaloniki port authorities to the state privatisation fund TAIPED. However, we question how much interest this wave of state asset sales will generate among investors and also anticipate strong public sector opposition.
- Greece’s government is keen on making the country Europe’s solar energy powerhouse, with up to EUR20bn being invested over our 10-year forecast period to 2021. However, we cite a number of obstacles. Firstly, the cost of solar panels (EUR20bn) could be difficult to raise; secondly, the requisite transmission infrastructure will be difficult to develop. However, in line with our view that Project Helios will enjoy political support and help attract investments, Solar Power entered into a memorandum of understanding with two fund management companies - Thermi-Taneo Venture Capital Fund and AIMS-Taneo Fund – to design and build large-scale solar energy facilities across Greece.
Greece’s poor growth prospects in the construction industry and difficult operating environment have put the country at the bottom of our league table for developed nations. It scores just 50.9 out of 100, falling far short of the developed market average of 65.7. It is therefore not surprising that many local companies have sought to increase international expansion to offset what is expected to be the long-term stagnation of the sector, with larger companies increasingly bidding for projects in the Balkans and the Middle East.
BMI Industry View 5
SWOT Analysis 7
Market Overview 8
Competitive Landscape 8
Table: EQS 8
Building Materials 11
Global 11
Europe 14
Table: Cement - Price/Volume % Variances (9m10/9m11) 17
Cement Forecast 18
Table: Greece Cement Production and Consumption Data, 2009 - 2016 18
Table: Greece Cement Production and Consumption Long-Term Forecasts, 2014 - 2021 19
Industry Forecast Scenario 20
Table: Greece Construction And Infrastructure Industry Data, 2008 - 2016 20
Table: Greece Construction And Infrastructure Long-Term Forecasts, 2013 - 2021 21
Construction and Infrastructure Forecast Scenario 23
Transport Infrastructure 26
Table: Greece Transport Infrastructure Industry Data, 2008 - 2016 26
Table: Greece Transport Infrastructure Industry Long Term Forecasts, 2013 - 2021 28
Transport Infrastructure Outlook And Overview 30
Major Projects Table – Transport 32
Energy and Utilities Infrastructure 35
Table: Greece Energy and Utilities Infrastructure Industry Data 35
Table: Greece Energy and Utilities Infrastructure Industry Data 36
Energy and Utilities Infrastructure Outlook And Overview 38
Major Projects Table – Energy & Utilities 40
Residential/Non-Residential Construction and Social Infrastructure 42
Table: Greece Residential and Non-residential Building Industry Data, 2008 - 2016 42
Table: Greece Residential and Non-residential Building Long-Term Forecasts, 2013 - 2021 42
Risk/Reward Ratings 45
Greece’s Risk/Reward Ratings 45
Rewards 45
Risks 45
Regional Overview 46
Developed States Infrastructure Risk/Reward Ratings 46
Table: Developed States’ Infrastructure Risk/Reward Ratings 51
Company Monitor 52
GEK Terna S 52
Aktor 54
J&P-AVAX Group 55
Global Overview 57
BMI Methodology 64
Industry Forecasts 64
Construction Industry 65
Data Methodology 65
New Infrastructure Data Sub-sectors 65
Construction 66
Capital Investment 67
Construction Sector Employment 68
Infrastructure Risk/Reward Ratings 68
Table: Infrastructure Business Environment Indicators 69
Project Finance Ratings 70
Table: Design And Construction Phase 71
Table: Commissioning And Operating Phase – Commercial Construction 72
Table: Commissioning And Operating Phase – Energy And Utilities 73
Table: Commissioning And Operating Phase – Transport 74
Sources 75
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