The Strategic 100 LA Latin America’S Top 100 Infrastructure Projects - 2013
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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 LongGterm%Project% Great%Projects% Infrastructure Competitiveness (CIC) survey. A ‘good enough’ score is Performance% 7.0, and Brazil’s score for 2013 is 4.65. Mexico’s vision scores are 4.7% 5.27% % also extremely low, just below Brazil’s scores, at 4.58. High-level Leadership%4.88% politicians spend little time on this issue. But there is a crucial difference at this time: Brazil is nearing the end of President Rousseff’s term in office, whereas Mexico is beginning a presidential term. This is the time to present a vision, and to build consensus around that vision - something that only Chile has done in Latin America over the last generation. The Strategic 100 LA for 2013 The infrastructure projects in this year’s Strategic 100 LA highlight projects that are critical for the future of the region -- and that will, in fact, define the region for the next generation. The total value of these projects is just over $149.2 Billion, almost double what the region spends on infrastructure each year. Note that projects are executed over a period averaging 4-5 years, and that the vast majority of projects on our list are new project opportunities planned for the next 3-12 months. CG/LA Infrastructure Inc Preliminary Release: April 24, 2013 Latin American Leadership Forum Mexico City | June 3–5, 2013 CG/LA Infrastructure Inc Preliminary Release: April 24, 2013 Latin American Leadership Forum Mexico City | June 3–5, 2013 Country Project Name Value Project Sponsor Stage Sector Sub-sector 1 Sub-sector 2 US$M Brazil Sinop Hydro $1,000 EPE Bidding Electricity Generation Hydroelectric Chile Pozo Almonte Solar 2 $87 Solarpack Bidding Electricity Generation Renewables Solar Costa Rica Reventazón $1,200 ICE Financial Electricity Generation Hydroelectric Hydroelectric Plant Closure Brazil North-Southeast $3,000 EPE Bidding Electricity Transmission Network Expansion Brazil North-Northeast $900 EPE Bidding Electricity Transmission Network Expansion Chile Alto Maipo Hydro $1,400 AES Gener Construction / Electricity Generation Hydroelectric Procurement Ecuador Hidroelectrica Coca $1,682 Ministerio de Electricidad y Construction / Electricity Generation Hydroelectric Codo Sinclair Energias Renovables Procurement Ecuador Hidroelectrica Toachi $520 Ministerio de Electricidad y Financial Electricity Generation Hydroelectric Pilaton Energias Renovables Closure Guatemala Strategic Expansion $218 Comisión Nacional de Bidding Electricity Distribution of the National Energía Eléctrica (CNEE) Electric System Mexico 480MW Las Cruces $750 CFE Feasibility Electricity Generation Hydroelectric Brazil São Manoel Hydro $1,200 EPE Bidding Electricity Generation Hydroelectric Brazil Apertados Hydro $520 EPE Bidding Electricity Generation Hydroelectric CG/LA Infrastructure Inc Preliminary Release: April 24, 2013 Latin American Leadership Forum Mexico City | June 3–5, 2013 Country Project Name Value Project Sponsor Stage Sector Sub-sector 1 Sub-sector 2 US$M Chile Parque Fotovoltaico $572 AES Gener Feasibility Electricity Generation Renewables Solar Los Andes Mexico 420MW Tenosique $545 CFE Bidding Electricity Generation Hydroelectric Peru L.T. Mantaro - $372 Proinversion RFP/ RFQ Electricity Transmission 500KV Marcona - Socabaya - Montalvo 500KV Chile Parque Eolico Loa $932 Ibereolica Feasibility Electricity Generation Renewables Eolic Mexico SolMex Energy 450 $1,400 Grupo Musa/Synergy Financial Electricity Generation Renewables Solar Project Technologies Closure Mexico Centro Morelos 660 $627 Federal Government Feasibility Electricity Distribution MW Electric Plant Argentina 500 Kv Transmission $550 Ministry of Federal Planning Construction / Electricity Transmission 500Kv Line Pico Truncado- Procurement Rio Turbio-Rio Gallegos-Calafate Mexico Refineria del $11,600 Pemex Construction / Oil & Gas Refineries Bicentenario Procurement Peru Mass Use of Natural $300 Proinversión RFP/ RFQ Oil & Gas Pipelines Gas Gas Nationwide Argentina Northeast Gas $1,640 Enarsa (Argentina) and Bidding Oil & Gas Pipelines Gas Pipeline YBFB (Bolivia)