CG-LA rates top 100 LatAm infra projects

CG/LA Infrastructure on Monday released its annual Strategic 100 Latin American Infrastructure Report, which this year identifies an estimated $179 billion in project opportunities scheduled to come to market in the next three to 18 months. 

The report, based on six months of analytics, was carved out of a preliminary list of 400 projects that the company crowd sourced from industry experts across the region, according to a related release. It is meant to be a guidebook for prospective investors, identifying “a series of projects that will generate renewed growth and opportunity creation throughout Latin America, and [focusing] on a new growth paradigm for the region”. 

“We've produced this list as part of a road map for Latin America, said CG/LA Infrastructure founder Norman Anderson. “Going forward, the focus needs to be on prosperity and opportunity creation within a context of re-energised public sector efficiently overseeing a tripling of private sector investment in the region  –  in all types of projects, from transportation, to energy to water/wastewater and IT.”

To inform the selection process, CG/LA employed its proprietary data model, weighing and ranking projects by taking into account macroeconomic factors, countries' priority sectors, project delivery track record, and a handful of other criteria including competitiveness, productivity, carbon efficiency, business opportunity and job creation. 

Topping the Strategic 100 is a plan to install a gas pipeline from Mexico through Guatemala and Honduras, a project whose sponsors include Pemex and CFE from Mexico, the Inter-American Development Bank (IDB), and Guatemalan public-private partnership (PPP; P3) office Anadie. The initiative, currently in the feasibility study phase, has an estimated price tag of $1.6 billion.

Tied for second place were a subway project in Peru and the expansion and upgrade of the Port of Santa Marta in Colombia, which come with estimated investment total costs of $5 billion and $500 million, respectively. The Line 3 subway project for the Metro de Lima y Callao in Peru will enter the tendering phase in Q1 2016 and the Colombian port project is currently in the planning stage. 

By far the most expensive project is the inter-oceanic canal planned in Nicaragua, sponsored by the HKND Group and the national government, valued at $50 billion. The project is in the pre-construction phase and ranked in twelfth place on the Strategic 100. The second costliest is the $10 billion inter-oceanic railway planned by the Bolivian government to connect Bolivia, Brazil and Peru, a plan which is now undergoing feasibility studies. 

Also featured in the report is a list of the “top five projects that didn't happen” in Latin America, which highlights some of the risks in the space.

In Brazil, a project to construct a high-speed rail (HSR) line between Sao Paulo and Rio di Janeiro failed four times to attract bidders and there are no formal plans to revive the project, the report says. In Mexico, plans for a $4.3-billion, 150-mile HSR line between Mexico, D.F., and Queretaro was cancelled following complaints that the bidding process was rushed by several HSR companies after a China-led consortium won the tender, putting the project on hold indefinitely.

Elsewhere in Mexico, a planned passenger rail project in the Yucatan Peninsula was tabled in January due to budget cuts related to falling oil revenues. Bolivia's InterOceanic Railway project, mentioned above as the second-costliest upcoming project in Latin America, is the sixth attempt at such a project; five attempts to build two separate railways in the country have failed in the past forty years.

The fifth of the failed projects mentioned in the CG/LA report is an electricity interconnection project looking to link the Colombian and Panamanian power grids. The Panamanian government pulled out of talks surrounding the deal, which began in 2012, citing the project's $500 million price tag as their reason. The project was restarted in 2014 and June 2016 is the new deadline for project documents.