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We expect low growth in the EU construction sector this year and next. The EU Construction Confidence Indicator is still positive but optimism is waning.

In June 2022, the EU's construction output was 2.3% lower than in February before the Ukraine war began. The difference in output between countries is huge. The Austrian and German construction sectors have experienced the biggest declines of -6.3% and -4.5%, respectively. Labour and material shortages are severe in these countries. In addition, German consumers are currently more reluctant to make home improvements than consumers in many other EU countries (see below). Austria has a lower number of building permits in 2021 which is likely to weigh on production this year and next. The Netherlands showed the smallest deterioration (-0.1%), however, compared to a year ago, Dutch contractor volumes still increased by a staggering 5.3%. Growth was especially high in the Dutch residential and commercial building sector. For Dutch civil engineering, the levels of nitrogen emissions in The Netherlands are still an issue.

On the other end of the spectrum, Poland’s construction sector showed the highest year-on-year growth in June (6.7%).

 

Table of contents: 

- Introduction

- News from the Global Infrastructure Initiative

- Disrupting transport: An interview with Robert Falck of Einride

- Unlocking hydrogen’s power for long-haul freight transport

- DHL on sustainable, customer-centric delivery in the last mile

- Mapping the way: Decarbonizing roads

- Managing capital risk in the race to net zero

- Roundtable recaps

* Hong Kong 2022: Surviving the productivity and inflation crisis

* Tokyo 2022: Navigating the new normal and decarbonization challenge in Japan’s infrastructure industry

* Sydney 2022: Scaling EV infrastructure to meet net-zero targets.

 

As of June 1, 2022, direct damage has reached over US$97 billion, with housing, transport, and commerce and industry being the most affected sectors. Damage is concentrated in the frontline oblasts (74 percent), particularly Donetska, Luhanska, Kharkivska, and Zaporizka, and in oblasts that were brought back under government control (22 percent) such as Kyivska and Chernihivska. Disruptions to economic flows and production, as well as additional expenses associated with the war, are collectively measured as losses and amount to some US$252 billion. Ukraine’s Gross Domestic Product (GDP) shrank by 15.1 percent year over year in the first quarter of 2022, and poverty is expected to increase from 2 to 21 percent (based on the poverty line of US$5.5 per person per day).

Reconstruction and recovery needs, as of June 1, are estimated at about US$349 billion, which is more than 1.6 times the GDP of Ukraine in 2021. Integrated into these needs are critical steps toward becoming a modern, low-carbon, disaster- and climate-resilient, and inclusive country that is more closely aligned with European Union standards. While the financing envelope is overwhelming, experience from other countries shows that reconstruction spans many years and a phased approach to reconstruction is critical. The report also details some US$105 billion needed in the immediate and short term to address the most urgent needs, including social infrastructure (such as schools and hospitals, especially in areas brought back under government control), preparation for the upcoming winter through winterization and restoration of heating and energy to homes, urgent repairs, gas purchases, support to agriculture and social protection, and restoration of vital transport routes. These actions will lay the groundwork for a safe, prioritized, and efficient reconstruction and recovery. 

 

 

Brazil, Chile, Uruguay, Colombia, Peru, Panama and Costa Rica top the indicators in Infrascope 2021/2022, which evaluates the capacity of countries to mobilize private investment via public-private partnerships.

The Infrascope 2021-2022 study finds that Latin American and Caribbean countries have made major strides toward creating environments that favor the emergence of efficient and sustainable public-private partnerships (PPPs) for infrastructure.

Brazil and Chile especially stand out in this area, while Colombia, Peru, Panama and Costa Rica also show good performance.

In general, the region has already laid the regulatory and institutional foundations for developing PPPs, and countries should now focus on improving project preparation, funding, and risk management, the report says.

Infrascope 2021-2022 is the seventh edition in a series of studies conducted every two years by Economist Impact, the analysis arm of The Economist Group, and commissioned by the Inter-American Development Bank (IDB).

The new edition of the Infrascope was expanded to include all 26 borrowing member countries of the IDB and features a new indicator framework to reflect the latest developments in PPPs for infrastructure. These developments include social and environmental sustainability, fiscal control and budget planning, transparency and accountability, and new financial instruments.

The study found that creating environments to better enable the development and implementation of PPPs for infrastructure is crucial to enhancing the efficiency, sustainability, public-private balance and quality of this mechanism in the region.

The study also points out that to develop fiscally viable infrastructure PPPs that are of high financial quality, it is necessary to reduce uncertainty via transparent, consistent and efficient risk allocation, and by applying lessons learned through ongoing project-performance monitoring.

It also recommends that countries place more emphasis on sustainability and preparation for the future to ensure economic and social infrastructure will withstand the test of time and climate change.

 

This Guidance is intended to aid government officials inform themselves about and establish suitable PPP legal frameworks and sets out key considerations and sample drafting in relation to a number of critical provisions in publicprivate partnership (PPP) legislation and supporting instruments. The Guidance explains the background to these essential legislative provisions, while providing benchmarking examples from markets with different legal traditions and maturities, to highlight the need to cater to a government's specific set of circumstances. Designed as a succinct and digestible practitioner’s guide, the Guidance is not intended to cover every possible aspect of a PPP legal framework.

Neither is it a recommendation to opt for PPP as the delivery model for projects, nor an analysis of PPP’s advantages and disadvantages.

While PPP may be implemented on a one-off basis without any specific supporting legal and institutional framework, most countries with successful PPP programs rely on a sound enabling framework. These typically regulate the development and management of PPPs from upstream to downstream, anchoring PPP processes in the respective country’s overall public investment management framework and providing for clear assignment of institutional roles and responsibilities, implementation of appropriate project origination and appraisal processes and strong risk management throughout the PPP lifecycle.

Numerous emerging and nascent PPP markets have therefore made and are making efforts to adopt their own PPP legislation, and in doing so are looking for good practice to follow. While several international organizations have developed guidelines for good governance in PPPs regarding different types of infrastructure projects, specific knowledge products on drafting PPP legislation have been less numerous. Important recent examples include the UNCITRAL Legislative Guide on Public-Private Partnerships (2019) and accompanying Model Legislative Provisions on Public-Private Partnerships (2019), as well as the Draft UNECE-EBRD People-first PPP/Concession Model Law (at the time of writing not yet formally adopted).

It is against this background that the World Bank developed the Guidance as a practical tool for government officials to complement the global body of knowledge as regards the understanding and drafting of PPP legal frameworks. In focusing on selected key legal provisions, the Guidance particularly aims to address considerations related to the fiscal, environmental and social sustainability of PPP projects as well as their resilience/adaptability to external shocks such as natural disasters, climate change extreme weather events and crises such as the COVID-19 pandemic.

With respect to the sample drafting contained in the Guidance, the authors would like to emphasize that it is neither intended to be exhaustive nor prescriptive, but is provided as illustrative and a starting point for jurisdiction-specific drafting. Specifically, it is not meant to be mandatory for use in World Bank financed operations which may involve the review or reform of legal enabling environments for PPP. Instead, the contents of this Guidance should be regarded as one of many inputs for governments to consider when thinking of establishing or amending an existing PPP legal framework. It should equally be noted that references to country examples throughout the document should not be interpreted as World Bank endorsement of the respective country’s PPP framework/program or as recommended best practice. Rather, these examples are given for benchmarking purposes and to illustrate the drafting considerations explained in each chapter of the Guidance.

The authors would finally like to stress that this publication is seen as an evolving process. The intention is to develop further iterations of the Guidance as market practice around the key themes covered in this document (and any new areas) evolves, conceivably in response to the omnipresent challenge of climate change and other future crises.

 

Sommaire : 

- Introduction

- News from the Global Infrastructure Initiative

- Here comes the 21st century’s first big investment wave. Is your capital strategy ready?

- Closing labor gaps to revitalize US infrastructure

- Infrastructure leaders need new capabilities to move toward net-zero emissions

- Built to last: An interview with Jennifer Lin of Trimble

- Building the net-zero workforce

- Roundtable recaps

 • Washington, DC, 2022: Future-proofing our water infrastructure

 • Chicago 2022: Preparing our power grids for energy transition and climate change.

 

From 2020 to 2021, the average value of disputes declined by 3% across the globe but remains at historically high levels compared to 2019 and earlier. The average time taken to resolve disputes increased significantly, by almost 15%, after steadily declining for three years.

Among regions surveyed, nearly 76% of respondents encountered disputes or claims specific to COVID-19 – a 12% increase since 2020. Similarly, 72% of respondents encountered impacts related to supply chain issues.

 

While the pace of digitalisation across the built and natural environments continues to gather momentum, there remains a significant opportunity for the construction sector to invest more widely in adopting model-centric and data-driven work processes and practices. The benefits of digitalisation (the adoption of digital technologies, defined for the purposes of this report as BIM and digital twins) are well understood by many market participants. Still, many barriers to adoption remain across a sector that is fragmented, under continual cost and time pressures, and frequently criticised for spending less on research and development than comparable industries. In addition, to support traditional construction processes such as cost estimation, prediction, planning and control; progress monitoring; and health, safety and well-being, the sector is now having to address other practices with some urgency. These include incorporating environmental, social and governance (ESG) principles; designing and measuring social value; implementing whole-life and whole-asset thinking; and carbon footprint calculation, benchmarking and reporting across projects.

To understand the sector’s current thinking around digitalisation, four additional questions were added to the RICS Global Construction Monitor (GCM) survey, which is produced every quarter. This report analyses the global responses received during the Q4 GC  2021 survey, which closed on 20 January 2022. The results represent a snapshot of current sentiment and behaviours from a sample of the sector. RICS’ professional sentiment monitoring has been found to accurately foreshadow market movement, and the GCM is a resource to be considered alongside other sources when assessing market trends or conducting market analysis. Monitoring market sentiment around digitalisation in construction supports a level of confidence in both assessing current levels of adoption and predicting the direction of travel for the sector. By repeating these new survey questions on an annual basis, RICS will be able to demonstrate the continued pace of adoption and the nature of the continuing barriers and challenges being faced by the sector.

The results point to a globally consistent level of digitalisation. They show a current focus on the well-established needs of the sector, but also indicate growing use of digitalisation in construction around the emerging themes of ESG, social value and whole-life concepts. There is also a consistent understanding of the barriers to further adoption. While other data and technology approaches have already been applied across the sector, it is the power of building information modelling (BIM) with its higher dimensions of time (4D), cost (5D), facility management (6D), sustainability (7D) and health and safety (8D), coupled with digital twins, that has the potential to provide the most additional value over the coming years.

Much has already been achieved and implemented by many market participants. However, to address the profound impact of construction on our world, the sector must move even faster to reap the benefits of BIM and digital twins. In this digital transformation journey, RICS professionals – particularly those working in quantity surveying and construction, project management, building surveying and infrastructure pathways – can play a significant role.