New year, new partners?
The P3 industry has ushered in a new year and everyone is sat afresh at their desks hoping for new project launches in the year, as well as prepping to bid on them, maybe with a new set of partners? Well, this would be the hope.
Except of course, towards the end of last year the industry heard announcements from two major P3 players that may have set some nerves jangling. In October, Skanska said it would stop bidding for “mega design-build P3 projects” in the US. While it has continued to work on smaller scale schemes, the announcement suggests the firm would not be keen on bidding for, say, another LaGuardia airport-style P3 deal. And in November, Aecom reported plans to pull out of 30 countries as it significantly reassesses its reach. Perhaps inevitably, this led to some rumors that it could follow Skanska's lead on US P3s, although it is important to note that, at present, it remains an active participant in the North American P3 space.
While so far this has not been seen as a trend or followed by other developers, the noises coming from two such major players in the market will no doubt have a knock-on effect on the confidence in the sector. And there's always the chance that companies may re-evaluate their business and take similar steps.
One way to help give confidence to the market would be a consistent P3 pipeline, complete with efficient procurement processes and good risk-transfer.
Visibility on federal planning regarding infrastructure would also provide a boost, but it is disappointing to note that the US government has not started the year on a smooth note, running into the third week of a government shutdown. In the wake of no solution to the shutdown yet, most public sector authorities remain agitated and workers unpaid. This could in turn have an impact on slowing down decisions related to infrastructure planning and funding.
The industry is still awaiting a bipartisan policy on infrastructure spending and further project launches. Given the intransigence at the top of the political tree, this bipartisan support on anything looks unlikely at present.
Sectors other than transportation such as water, broadband and social infrastructure deserve more attention and public authorities need federal certainty to gain the confidence to venture into these.
To end on a more positive note, however, it may be worth looking to another major global contractor. For while Aecom and Skanska are looking uncertainly at the P3 pipeline, German firm Hochtief has taken a different view. In its November update, the firm was upbeat about the potential for P3s, seeing a “very substantial” P3 tender pipeline across its key markets.