Ecuador Infrastructure Report Q1 2013
Business Monitor International, January 2013, Pages: 59
BMI View: Based on quarterly data from the Banco Central del Ecuador, we have revised up our 2012 growth outlook to 15.21%. First half real industry value has surprised, significantly to the upside -
averaging 21% higher compared to H111 - however, the trend is for a deceleration and, therefore, we believe the year as a whole will average lower. Additionally, pre-election spending, as Correa seeks to boost popularity in a country where infrastructure shortcomings are notable, is providing part of this boost and should sustain high growth going into 2013.
- Major developments in the sector: The announcement in November that Ecuador's Manta Port concession had failed to attract any bids underscores our long held pessimistic outlook for the country's business environment. We had long held the view that the concession would be a tough sell, given the controversial and premature end of the previous concession. With President Rafael Correa set to run for a third term, we see it unlikely that any significant improvements will be made to the business environment; this will result in the country continuing to fail to attract the private investment necessary to see tangible improvements in its infrastructure.
- In September 2012, it was announced that Ecuadorian state-controlled subway operator Metro de Quito had received a total of five proposals for the construction of the first two metro stations of the Quito subway line. The contract for the La Magdalena and El Labrador stations in the city's central southern and central northern regions were scheduled to be awarded on October 15 2012. Phase 1 of the project is expected to include an investment of US$64.8mn, which will be jointly funded by Quito's municipality and the national government. The construction work on the La Magdalena station and the El Labrador station is due to start in November 2012 and March 2013 respectively, with the completion scheduled to take 18 months.
- In August 2012, the city government of Quito in Ecuador issued a tender to build the first two stations of the Quito subway line. The contract for the La Magdalena and El Labrador stations in the city's central southern and central northern regions, respectively, is to be awarded by Metro de Quito on October 1 2012. The stations are estimated to cost US$64.8mn, with the first planned metro line of Quito requiring a total investment of US$1.4bn. The subway line will connect the city's southern district of Quitumbe with El Labrador in Quito's northern area. The metro will comprise 15 stations, with 18 electric trains expected to operate along the line.
- Residential construction in Ecuador has surged since the start of 2011, having increased its contribution to total construction by 6.7% through the first nine months of the year. This was underpinned by an increase in public housing provision and a credit-fuelled increase in private sector developments. The government's creation of a bank designed to facilitate greater lending to low-income families in October 2010 will have served to unlock significant pent-up demand for new homes.
While a number of factors have boosted prospects for Ecuador's construction industry over the medium term, weaknesses within the country's business environment will continue to present risks and cap growth. Chief among these will be financing. Ecuador's growth trajectory still remains heavily dependent on oil prices, which is concerning, especially given the uncertain global growth outlook. Meanwhile,
political risk will continue to provide cause for concern for investors in the country, with anti-democratic nuances and populist policies at odds with attracting international investment in infrastructure. Ecuador's President Rafael Correa continues to tighten his grip over Ecuador's political institutions, creating an uncertain and inhospitable climate for private investors.
BMI Industry View 5
SWOT Analysis 7
Ecuador Infrastructure SWOT 7
Market Overview 8
Competitive Landscape 8
Building Materials 9
Latin America 9
Cement Forecasts 14
Table: Ecuador Cement Production And Consumption Data, 2009 - 2016 14
Table: Ecuador Cement Production And Consumption Long-Term Forecasts, 2014 - 2021 15
Industry Forecast Scenario 16
Table: Ecuador Construction And Infrastructure Industry Data, 2010-2016 16
Table: Ecuador Construction And Infrastructure Industry Long Term Forecasts, 2015-2021 17
Construction And Infrastructure Forecast Scenario 18
Transport Infrastructure 21
Outlook and Overview 21
Table: Competitiveness Of Ecuador's Infrastructure 21
Major Projects Table - Transport 25
Table: Major Projects - Transport 25
Energy And Utilities Infrastructure 27
Outlook and Overview 27
Major Projects Table - Energy And Utilities 29
Table: Major Projects - Energy And Utilities 29
Residential/Non-Residential Construction And Social Infrastructure 31
Outlook and Overview 31
Major Projects Table - Residential/Non-Residential Construction And Social Infrastructure 32
Table: Major Projects - Residential / Non-Residential Construction And Social Infrastructure 32
Risk/Reward Ratings 33
Ecuador's Risk/Reward Ratings 33
Rewards 33
Risks 33
Regional Overview 34
Latin America Infrastructure Risk/Reward Ratings 34
Table: Americas Infrastructure Risk Reward Ratings 40
Company Monitor 41
Isolux Corsán 41
Semaica, Sevilla y Martínez CA 43
Global Overview 45
Methodology 52
Industry Forecasts 52
Construction Industry 53
Data Methodology 53
New Infrastructure Data Sub-sectors 53
Construction 54
Capital Investment 55
Construction Sector Employment 56
Infrastructure Risk/Reward Ratings 56
Table: Infrastructure Business Environment Indicators 58
Company Monitor
Isolux Corsán
Semaica, Sevilla y Martínez CA
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