US, China may offer best road ahead for investors

A new survey on the transport sector from consultants EC Harris shows that, of 17 nations around the world, the US and China have the best match between the attractiveness of the investment opportunity and its size.

In a survey providing a relative ranking of the transport sectors in 17 countries globally, the US and China emerge near the top of the rankings for both attractiveness and size.

The Investment in Transport Infrastructure survey, undertaken by built asset consultancy EC Harris, ranks the US second for the attractivess of its transport sector to investors and fourth for its size. In a precise inversion of the US ranking, China is ranked fourth for attractiveness and second for size.

The survey concludes that Germany is the most attractive sector for transport investment, noting “the integral role it will play in the proposed European rail network and the plans for a Europe-China rail line”. However, the size of the transport investment programme in Germany is only eighth of the 17.

While India’s huge roads programme pushes it to the top of the ranking for size of investment opportunity, the country is ranked only 12th for the attractiveness of that programme. India has experienced considerable difficulties in getting deals through the pipeline, partly as a result of the need for better definition of the legal frameworks.

The research shows that, aside from China, the BRIC nations may have plenty of work to do to attract investors to their burgeoning investment programmes. While ranked third for the size of its programme, Russia is a lowly 14th when judged on attractiveness. Brazil gets mid-table rankings of seventh for size and eighth for attractiveness.

Says Mike Prior, EC Harris head of transportation: “The research underlines that ambition alone will not be enough if emerging nations are to deliver the purpose-built transport infrastructure that they need to support their continued economic growth.

“Whilst some investors may be prepared to take on a higher level of risk, they will still want to receive greater assurance from non-OECD countries particularly around their approach to mechanisms like PPP funding as a way to help mitigate some of the risk they face.”

The highest-ranked Latin American transport sector for attractiveness is Chile, which comes just one place below China in fifth. The survey concluded that the firm’s ports and highway sectors were “particularly well placed” to attract inward foreign investment.

And who collects the least-coveted award of lowest-ranked? That unfortunate title goes to Venezuela, which comes last of the 17 for both attractiveness and size.

EC Harris ranked the 17 nations on their attractiveness based on factors including political and economic stability, government incentives and policies, expected FDI growth and the ease of entering and doing business in that market. Each country was assessed across the four main transportation sectors – aviation, rail, highways and ports – and their overall ranking was then calculated based on the sum of these four figures.