Latin American Leadership Forum Mexico City | June 3–5, 2013
The Strategic 100 LA Latin America’s Top 100 Infrastructure Projects - 2013
CG/LA Infrastructure assesses infrastructure projects throughout the world, through our annual lists of the Top 100 Global Projects, North American projects, and Latin American Projects. Each project is ranked along five separate criteria (our Latin American list is indexed below by sector followed by rank). The Strategic 100 LA list this year is worth $149.2 billion, and includes projects from 18 countries.
The Region Latin America is at a tipping point. On the one hand, the region continues to grow at a significant rate, creating even greater demand for infrastructure - in addition, greater repressed demand is compounded by the region’s long-term underinvestment in infrastructure. On the other hand, Latin America is investing less than its global competitors. Unless the region dramatically increases infrastructure investment, it will begin to lose global competitiveness, at velocity.
Growth for the entire region is set to average 3.5% this year, and is projected at 4.5% in 2014. The GDP star continues to be Peru, projected to grow at 6.5% this year, followed by Chile at 4.8%, and Colombia at 4.4%. Brazil, Mexico and Argentina, the largest economies in the region, will grow at 3.1%, 3.5% and 3.9% respectively.
This twenty-four month growth period is a unique window of opportunity to think through and develop a regional infrastructure initiative.
Bringing Projects Quickly to Life The key is to identify and prioritize the right projects - those that make a clear and unequivocal contribution to both a country’s long-term competitiveness and to immediate quality of life. Every project needs an elevator pitch, and that pitch has to be convincing. This is an area in which Latin America is weak (see the section on Vision), where there is an opportunity - and a necessity - to make a tremendous improvement.
CG/LA Infrastructure Inc Preliminary Release: April 24, 2013 Latin American Leadership Forum Mexico City | June 3–5, 2013
Note that this is the 11th edition of the ‘top’ projects in Latin America. The evolution of project demand, and the increased depth in capacity to execute on that demand, is extraordinary. In our first three years we identified the Top 25 projects in the region, and for the next couple of years we stretched to reach the Top 50 projects. Now there is no problem identifying 100 strong, strategic projects. The 2013 Strategic 100 LA list began in the 200+ project range, and shows a huge improvement in both the quality and quantity of projects.
The region’s overall goal needs to be a doubling of the size of infrastructure investment - within 24 months, and continuing for at least 10 years. This will require dramatically improved public sector performance and dramatically increased private sector participation to ensure that the right projects are built on time and on budget.
Improvements in two areas - grandly conceptual - can make all the difference:
1. Strategic Infrastructure. It is critical to place infrastructure decision-making and execution at the very pinnacle of a country’s national economic security plan. The idea of strategic infrastructure is fundamental. CIC#Brazil# 4.65% We can’t emphasize enough that infrastructure decisions - projects and Consensus%Vision% 10% 8% Public%Sector%Technical% programs - are high-level decisions taken for the sake of immediate and Local%equity%capacity% Capacity% 6% 5.7% long-term competitiveness, in a dynamically globalizing world economy. 5.35% 4% These are truly strategic economic decisions, in which a country is (a) 2% Public%Sector%Strategic% Local%EPC%firms% 0% Capacity% investing in order to generate increased wealth and improved quality of 6.9% life over a period of 40-50 years, and (b) betting on projects that - 4.85%
LongFterm%Project% Great%Projects% physically, financially, and in terms of management - become the Performance% 5.1% 5.7% building blocks for the next set of strategic choices and the next Leadership% generation of projects. 4.45%
So the decisions on infrastructure projects - which to prioritize, how to
CG/LA Infrastructure Inc Preliminary Release: April 24, 2013 Latin American Leadership Forum Mexico City | June 3–5, 2013
build - are deeply strategic, and they determine not only an economy’s global competitiveness, but its very options for competitiveness.
2. The Role of Vision. Vision is the critical element in any serious modern infrastructure initiative - it is the single greatest reason for the failure of infrastructure initiatives in Latin America, and globally, and impacts directly the role of leadership.
Vision is critical for two reasons: first, a vision brings everyone together, it is a consensus view of - (a) how a country sees itself now, (b) how it wants to see itself in the future, and (c) how it plugs into the global economy, (d) how it competes, and (e) what it believes is CIC#Mexico#2013# needed to compete more successfully. A clear consensus vision is also 4.58% Consensus%Vision% necessary to allow countries to sustain infrastructure initiatives across 10% 8% %Public%Sector%Technical% Local%equity%capacity% Capacity% political administrations, a critical problem in twenty-first century 6% 5.75% democracies. 4% 5.35% 2% %Public%Sector%Strategic% Local%EPC%firms% 0% Note the difficulty that Brazil and Mexico currently have in building Capacity% 6.97% 4.86% infrastructure - and their very low vision scores in our annual Country