Construction and Engineering

in

South America
Market trends, key players, emerging opportunities

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Contents
DATA SELECTION ......................................................................................................................................... 4 GENERAL VIEW ON THE SOUTH AMERICAN MARKET .......................................................................................... 5 THE MAIN NATIONAL MARKETS ...................................................................................................................... 7 BRAZIL ................................................................................................................................................... 8 ARGENTINA........................................................................................................................................... 10 THE RISING STARS ...................................................................................................................................... 12 URUGUAY ............................................................................................................................................. 13 BOLIVIA ................................................................................................................................................ 15 ECUADOR ............................................................................................................................................. 17 PERU ................................................................................................................................................... 19 COLOMBIA ............................................................................................................................................ 21 LIST OF FUNDING AGENCIES ........................................................................................................................ 23

DATA SELECTION

This survey is based on all contracts that were awarded in, 2010 and 2011. The survey includes contracts awarded by 60 International and bilateral donors (list at the end of the survey). All data come from Assortis data bases. These data bases and their detailed information are fully available to Assortis clients. Assortis register all tenders and contracts published by 60 donors. Tenders and contracts are analyzed and classified according to Assortis universal classification system, including more than 300 sectors and subsectors. The contracts taken into account for the current survey mach at least one of the following sectors of Construction and Engineering: Building/Construction/Civil works/Demolition Highways/Roads/Bridges/Tunnels Hydraulic engineering/ Works supervision Only contracts with a value above 25.000USD were taken into account in the current survey. In total, 512 contracts were processed to edit the results of this survey.

GENERAL VIEW ON THE SOUTH AMERICAN MARKET

The South American market drained close to 1,25 billion USD in 2011. The World Bank (WB) is the main investor and the Inter-American Development Bank (IADB) accounts for one third of the market.

Donors Investments (USD) WB 838.607.000 IADB 410.145.558 Total 1.248.752.558 Investments of the WB and the IADB in 2011

FA Distribution of Investments

33% WB IADB
67%

The distribution of investments between the countries in 2011 is as follows :

Country Argentina Bolivia Brazil Chile Colombia Ecuador Guyana Paraguay Peru Uruguay Total

Investments (USD) 429.041.962 42.306.681 596.940.652 2.139.000 7.967.157 39.583.054 16.145.468 22.702.335 38.355.784 53.570.465 1.248.752.558

Country Brazil Argentina Uruguay Bolivia Ecuador Peru Paraguay Guyana Colombia Chile Total

Investments (USD) 596.940.652 429.041.962 53.570.465 42.306.681 39.583.054 38.355.784 22.702.335 16.145.468 7.967.157 2.139.000 1.248.752.558

Country Distribution of Investments

3% 4%
4% 3% Brazil Argentina 48%

Uruguay Bolivia
Ecuador

34%

Peru

THE MAIN NATIONAL MARKETS

Brazil and Argentina are the most important markets of South America for the considered sectors. Together, they account for more than 80% of the South American market.

BRAZIL

The Brazilian market weights about 600 million USD in 2011.

Evolution Investments in Brazil fell by 20% between 2010 and 2011. Year 2010 2011 Investments (USD) 749.345.028 596.940.652

Situation in 2011 The WB provides the vast majority of funding in Brazil.

Donors WB IADB Total

Investments (USD) 562.508.000 34.432.652 596.940.652

FA Distribution of Investments
6%

WB IADB

94%

Main companies active in Brazil in 2011 CAF Construcciones y Auxiliar de Ferrocarriles S.A, CAF Brasil Industria E Comercio S.A : Awarded a 382.590.000USD contract for the supply of 26 trains, with six cars each for Line 5Lilac Bombardier Transp. Brasil LTDA, Bombardier European Investments Slu : Awarded a 116.458.000USD contract for the design, supply and implementation of the signaling system, centralized control system, data transmission system and platform screen doors system. Line 5-Lilac of metro Sao Paulo Serveng-Civilsan Awarded a 18.351.000USD contract for highway rehabilitation in the State of Sao Paulo

Example of project Sao Paulo Metro Line 5 Project The objective of the Sao Paulo Metro Line 5 Project is to improve the mobility of public transport users in the Capao Redondo-Largo Treze Chacara Klabin corridor in a cost-efficient and environmentally-friendly manner. The components of the project include: extending the existing Line 5 by approximately 12 km from the southwest of the city to the expanded center by 2013. After the extension, the line will consist of a 20.1 km metro line going from Capdo Redondo station to Chcicara Klabin station and including the 15 intermediate stations.

ARGENTINA

The Argentine market weights more than 400 million USD in 2011.

Evolution Investments in Argentina fell by 22% between 2010 and 2011.

Year 2010 2011

Investments (USD) 551.836.586 429.041.962

Situation in 2011 Investments in Argentina are shared between the WB and the IADB; the WB provides the most important part of investments.

Donors WB IADB Total

Investments (USD) 260.789.000 168.252.962 429.041.962

FA Distribution of Investments

39%

WB IADB 61%

Main companies active in Argentina in 2011 HOMAQ S.A. : Awarded a 50.666.000USD contract for the rehabilitation and maintenance of roads, grid 503. RN 14 and RN 120, Corrientes province (Malla 503) Proyeccion Electroluz Srl: Awarded a 46.253.220USD contract in the Norte Grande Electricity Transmission Program UTE Vialmani: Awarded a 44.741.000 contract for the rehabilitation and maintenance of road network 403

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Example of project AR APL2 National Highway Asset Mgt The overall purpose of the Second Phase (APL2) of the National Highway Asset Management Project is to further develop and implement an efficient road management strategy, bringing about and using all the necessary capabilities to preserve on a sustainable basis the national road network. The project specific objectives are: a. Further preserve the condition of vital road assets, through the gradual expansion of performance-based contracts for the rehabilitation and maintenance of the non-concessioned primary paved network; b. Further strengthen road sector management through carrying out a renewal program of the National Highways Directorate (DNV) to revitalize its role in the sector by: (i) reinforcing its human resource base; (ii) strengthening its planning capacities; and (iii) consolidating its transformation into a results-oriented organization accountable for specific outputs. The Project has 4 components: 1) Rehabilitation and Maintenance through performancebased contracts; 2) Bridge Restoration and construction management; 3) Road safety; and 4) Institutional Renewal for the completion of DNV's institutional renewal action plan.

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THE RISING STARS

Five countries show significant increases in investments: Uruguay, Bolivia, Ecuador, Peru and Colombia.

Country Uruguay Bolivia Ecuador Peru Colombia

2010 5.890.000 17.816.937 27.680.315 18.945.893 3.928.483

2011 53.570.465 42.306.681 39.583.054 38.355.784 7.967.157

Evolution of Investments (USD)

60.000.000 50.000.000 40.000.000 Uruguay Bolivia

30.000.000 20.000.000
10.000.000 0 2010 2011

Ecuador
Peru Colombia

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URUGUAY

The Uruguayan market weights more than 50 million USD in 2011.

Evolution Investments in Uruguay increased by 810% between 2010 and 2011. Uruguay is the 3rd beneficiary of investments in South America.

Year 2010 2011

Investments (USD) 5.890.000 53.570.465

Situation in 2011 Investments in Uruguay come almost totally from the IADB.

Donors IADB WB Total

Investments (USD) 53.509.465 61.000 53.570.465

FA Distribution of Investments
0%

IADB WB

100%

Main companies active in Uruguay in 2011 Techint SACI Awarded a 32.637.450USD contract in the Integrated Sanitation Program of Ciudad de la Costa GRINOR Awarded a 11.050.098USD contract in the Road Infrastructure Program Hernandez y Gonzalez SA Awarded a 9.373.992USD contract in the Road Infrastructure Program

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Example of project Road Infrastructure Program El Banco Interamericano de Desarrollo (BID) y el Gobierno de la Republica Oriental del Uruguay han firmado el contrato de prestamo arriba mencionado para la Ejecucion del Programa de Infraestructura Vial. El objeto del Programa es mejorar el transporte terrestre de cargas y pasajeros en los corredores prioritarios de la red vial de Uruguay con el fin de aumentar la competitividad y la integracion regional. La ejecucion del Programa sera llevada a cabo por el Ministerio de Transporte y Obras Publicas, a traves de la Direccion Nacional de Vialidad (DNV) y la Asesoria de Financiamiento Exterior - Area BID del Ministerio. El Programa incluye los siguientes componentes: 1: Obras de rehabilitacion de carreteras (aproximadamente 650 Km de tramos prioritarios de la Red Vial Nacional) y construccion y mejoramiento de puentes 2: Plan de inversiones en seguridad vial: mejoramiento y reposicion de senales; mejoramiento de iluminacion en intersecciones criticas; demarcacion de pavimentos en tramos peligrosos; defensas metalicas; material de apoyo a escuelas en zonas de rutas nacionales y construccion y demarcacion de sendas y refugios peatonales; diseno e implementacion de campanas de educacion y concientizacion ciudadana en seguridad vial). 3: Fortalecimiento institucional de la DNV: actualizacion del relevamiento del estado fisico de la red; alternativas tecnicas para automatizar la recaudacion de peajes en tramos concesionados; auditorias tecnicas de calidad de diseno y obras del Programa; alternativas para el mejoramiento de la capacidad de control de niveles de carga y sobrepeso de vehiculos; consolidacion del sistema de conteo de vehiculos; capacitacion en modelos de gestion vial; capacitacion en temas sociales y ambientales; modernizacion del Sistema de Gestion de Senalizacion; mejoramiento del Sistema de Analisis de Accidentes de Transito.

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BOLIVIA

The Bolivian market weights more than 40 million USD in 2011.

Evolution Investments in Bolivia increased by 137% between 2010 and 2011.

Year 2010 2011

Investments (USD) 17.816.937 42.306.681

Situation in 2011 Investments in Bolivia come mostly from the IADB.

Donors IADB WB Total

Investments (USD) 41.035.681 1.271.000 42.306.681

FA Distribution of Investments
3%

IADB WB

97%

Main companies active in Bolivia in 2011 Sergut S.R.L. Awarded a 11.463.774USD contract in the Road Conservation in the East-West Corridor Project Global R.R LTDA Awarded a 10.644.450USD contract in the Road Conservation in the East-West Corridor Project Apolo LTDA Awarded a 10.259.433USD contract in the Water and Sewerage Program in Peri Urban Areas

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Example of project Road Conservation in the East-West Corridor Project El Estado Plurinacional de Bolivia ha recibido financiamiento del Banco Interamericano de Desarrollo (BID), y se propone utilizar los fondos para efectuar los pagos correspondientes a la contratacin de obras, servicios conexos y servicios de consultora en el marco del Proyecto de Conservacin Vial del Corredor Este-Oeste. El objetivo principal del proyecto es el mejoramiento de las condiciones de transitabilidad de dos tramos de la Red Vial Fundamental (RVF) con el propsito de favorecer la integracin econmica y social del pas a nivel interno y con otros pases, mejorando la productividad y promoviendo el crecimiento y desarrollo de la poblacin, objetivos coherentes con el Plan Nacional de Desarrollo (PND). Los objetivos especficos del Programa son: (i) reducir los costos de transporte mediante la mejora de las condiciones de transitabilidad del corredor Este-Oeste de la Red Vial Fundamental, que conecta importantes zonas de produccin bolivianas con el mercado interno y de los pases vecinos; y (ii) preservar el patrimonio vial del pas, promoviendo su sostenibilidad mediante el desarrollo e implementacin de mecanismos apropiados de mantenimiento. La ejecucin del proyecto comprende la contratacin de empresas constructoras, firmas consultoras para la supervisin tcnica de las obras y auditora externa financiera y operativa del proyecto. Componente I. Obras de Mantenimiento Peridico: 1.1 Tramo Parotani-Confital 78 km 1.2 Tramo Espritu Santo II-Ivirgarzama 95 km

Componente II. Supervisin y auditoria: 2.1 Supervisin de las obras de mantenimiento peridico 2.2 Auditoria externa financiera y operativa

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ECUADOR

The Ecuadorian market weights almost 40 million USD in 2011.

Evolution Investments in Ecuador increased by 43% between 2010 and 2011.

Year 2010 2011

Investments (USD) 27.680.315 39.583.054

Situation in 2011 Investments in Ecuador come totally from the IADB.

Donors IADB WB Total

Investments (USD) 39.583.054 0 39.583.054

FA Distribution of Investments
0%

IADB WB

100%

Main companies active in Ecuador in 2011 Hidalgo&Hidalgo S.A Awarded a 19.342.344USD contract in the First Road Infrastructure and Maintenance Program Compania Verdu S.A. Awarded a 15.527871USD contract in the First Road Infrastructure and Maintenance Program Asociacion Incoydes Ingennya-Nyli Awarded a 2.557.245USD contract in the First Road Infrastructure and Maintenance Program

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Example of project First Road Infrastructure and Maintenance Program The general objective of the conditional credit line for investment projects (CCLIP) is to help make Ecuadors population more competitive and increase its social and economic integration. The first operation under the CCLIP will further this general objective and the National Development Plan (PND) through the sustainable improvement of freight and passenger transport on the National Road System (NRS). The specific objectives of the first operation are: (i) to lower transportation costs and shorten travel times by improving serviceability and road safety conditions for a substantial portion of the NRS priority corridors and roads that connect production areas with the domestic market and neighboring countries; (ii) to preserve the countrys road assets and ensure their sustainability through the development and implementation of effective maintenance mechanisms; and (iii) to strengthen the MTOPs management capabilities as the apex agency responsible for the road sector at the national level.

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PERU

The Peruvian market weights almost 40 million USD in 2011. Evolution Investments in Peru increased by 102% between 2010 and 2011.

Year 2010 2011

Investments (USD) 18.945.893 38.355.784

Situation in 2011 The IADB is the main investor, complemented by the WB.

Donors IADB WB Total

Investments (USD) 28.921.784 9.434.000 38.355.784

FA Distribution of Investments
25%

IADB WB

75%

Main companies active in Peru in 2011 Innovacion Civil Espanola S.L-INNCIVE: Awarded a 1.856.000USD contract for the profiling and development of technical records for water and sanitation projects within the San Martin region, and a 1.579.000USD contract for the profiling and development of technical records for water and sanitation projects within the Apurimac region Oficina de Ingenieria y Servicios Tecnicos: Awarded a 1.406.000USD contract for the profiling and development of technical records for 42 municipalities within the Lambayeque region Calpe E.I.R.L Awarded a 1.202.000USD contract for the profiling and development of technical records for 38 localities selected in the scope of the Lambayeque region

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Example of project National Rural Water Supply Health and Sanitation Project The development objective of the National Rural Water Supply and Sanitation Project (PRONASAR) is to increase the sustainable use of new and rehabilitated water supply and sanitation facilities in rural areas and small towns while emphasizing improvement in hygienic practices and training in operation and maintenance. There are four project components. The first implements demandresponsive and sustainable basic water and/or sanitation services for rural communities through constructing and rehabilitating water points, piped systems, and sanitation facilities as well as training in operation and management of water and sanitation facilities and extensive hygienic education. The second component strengthens local communities' capacity to manage services by 1) supporting an effective community participation process during the entire project cycle; 2) introducing sound financial and economic principles to value water and sanitation services; and 3) forming and training community-based water committees. The third component strengthens municipal-district and provincial-level capacity to plan and oversee water and sanitation services to rural communities in a sustainable and cost-efective way, including the use of private sector participation. The fourth component strengthens central government capacity, specifically the Rural Water Department in the Vice Ministry of Water and Sanitation to develop sector policies, legislation, and information databases for planning and oversight.

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COLOMBIA

The Colombian market weights almost 8 million USD in 2011. This limited market shows a sharp increase in investments.

Evolution Investments in Colombia increased by 103% between 2010 and 2011.

Year 2010 2011

Investments (USD) 3.928.483 7.967.157

Situation in 2011 Investments in Colombia come mostly from the IADB.

Donors IADB WB Total

Investments (USD) 7.723.157 244.000 7.967.157

FA Distribution of Investments
3%

IADB WB

97%

Main companies active in Colombia in 2011 Concorcio Cice Awarded a 7.064.220USD contract in the Medellin River Sanitation Program. Pricewaterhousecoopers Awarded a 403.822USD contract in the Medellin River Sanitation Program. Union Temporal Universidad De Los Andes Awarded a 211.312USD contract in the Medellin River Sanitation Program.

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Example of project Medellin River Sanitation Program The project considers the execution of works as part of the Program for Cleaning the Medelln River, including the construction of the Bello Wastewaters Treatment Plant (PTAR), the North interceptor of the Medelln River and the joints between the collectors and the North interceptor. Additionally a component on institutional strengthening would be developed that includes the following aspects: i) support to the implementation of the International Norms of Financial Information of the EEPPM group; ii) training in areas related to the provision and water sanitation.

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LIST OF FUNDING AGENCIES

1.
2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. 51. 52. 53. 54. 55. 56. 57. 58. 59. 60.

ADB - Asian Development Bank

AfDB - African Development Bank DFID - Department for International Development EBRD - European Bank for Reconstruction and Development EC - European Commission EIB - European Investment Bank IADB - Inter-American Development Bank USAID - U.S. Agency for International Development WB - World Bank ADC - Austrian Development Cooperation AECID - Agencia Espaola de Cooperacin Internacional para el Desarrollo AFD - Agence Franaise de Dveloppement AusAID - Australian Agency for International Development BADEA - Arab Bank for Economic Development in Africa BTC - Belgian Technical Cooperation CABEI - Central American Bank for Economic Integration CDB - Caribbean Development Bank CIDA - Canadian International Development Agency CS - Commonwealth Secretariat DANIDA - Danish International Development Assistance FAO - Food and Agriculture Organization of the United Nations FIRST - FIRST Initiative FORMIN - Ministry for Foreign Affairs of Finland GEF - Global Environment Facility GIZ - Deutsche Gesellschaft fuer Internationale Zusammenarbeit GN - Government Notices IFAD - International Fund for Agricultural Development IFC - International Finance Corporation IsDB - Islamic Development Bank JICA - Japan International Cooperation Agency KFAED - Kuwait Fund for Arab Economic Development KfW - KfW Bankengruppe LuxDev - Luxembourg Agency for Development Cooperation MCC - Millennium Challenge Corporation MRC - Mekong River Commission NADB - North American Development Bank NATO and NAMSA NDF - Nordic Development Fund NORAD - Norwegian Agency for Development Cooperation NZAID - New Zealand Aid & Development Agency OAS - Organization of American States OECD - Organisation for Economic Co-operation and Development OFID - OPEC Fund for International Development OSCE - Organization for Security and Co-operation in Europe SADC - Southern African Development Community SDC - Swiss Agency for Development and Cooperation SIDA - Swedish International Development Authority UN - United Nations UNDP - United Nations Development Programme UNESCO - United Nations Educational, Scientific and Cultural Organisation UNFCCC - United Nations Framework Convention on Climate Change UNFPA - United Nations Fund for Population Activities UNHCR - United Nations High Commissioner for Refugees UNICEF - United Nations Childrens Fund UNIDO - United Nations Industrial Development Organization UNODC - United Nations Office on Drugs and Crime UNOPS - United Nations Office for Project Services UNV - United Nations Volunteers USCDCP - United States Center for Disease Control and Prevention USNIH - United States National Institute of Health

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