The infrastructure community, as surveyed by Infrastructure Investor, is convinced the European public-private partnership (PPP) market has been through its roughest patch in a decade and that the only way is up from now on.
The survey was conducted in the aftermath of the European PPP Expertise Centre’s (EPEC) recent review of the European PPP market in 2012. The think tank found the market hit its lowest point since 2003, closing on just under €12 billion worth of projects last year. EPEC is a think tank within the European Investment Bank.
About 45 percent of our readers believe the market has truly bottomed out last year and can only improve going forward. But an almost equally significant 36 percent of those surveyed took the opposite view, arguing there is no visible pipeline and concluding that this year will actually be worse.
Only some 19 percent of respondents thought the PPP market will better, but not reach the frenzied activity recorded in the mid-2000s.
According to EPEC, 66 PPPs reached financial close in 2012 totalling €11.7 billion. That’s a 21 percent drop in number of deals closed compared with the 84 clinched in 2011, and a 35 percent drop in market size in relation to the €17.9 billion of PPPs closed two years ago.
Worryingly, four large projects accounted for 52 percent of the market in 2012 – two in France, one in the UK and one in the Netherlands. However, there were less big projects closed in 2012, with average transaction size decreasing from €213 million in 2011 to €177 million.