A number of the trends continue to remain key issues today, although many have evolved. In 2015 we have noted significant moves by governments, multilaterals and development banks to ‘unclog’ the pipeline. Cities were also a big topic in 2014 and continue to be so in 2015, but with a larger emphasis on urban mobility. Asset sales and improved asset management played a significant role in our trends report last year and again this year.
“Infrastructure is a story of evolution. It drives social and economic development. It enables us to renew our public services and physical surroundings. It allows societies, economies, companies and individuals the opportunity to live to their full potential. At the same time, the way we approach infrastructure itself is also evolving. Some of the shifts in the sector are sudden and disruptive. Others evolve slowly, ebbing and flowing in and out of political consciousness, as governments and businesses react to changing circumstances. For the past three years, KPMG’s Global Infrastructure practice has tracked the annual tides and trends driving the world’s infrastructure markets. Each year, we have published our perspective of the top 10 trends that will likely impact the domestic and worldwide infrastructure market over the coming year,” says Daniela Nemoianu, Executive Partner, KPMG in Romania, specialist in infrastructure and PPPs.
Governments take action to unclog the pipeline
Infrastructure has never been higher profile. The G20 Summit in Brisbane in November 2014 put the topic of infrastructure squarely on the global agenda with governments around the world recommitting themselves to helping bridge the infrastructure gap by implementing more efficient approval processes and reducing barriers to private investment.
Market reforms: status quo is not fit for purpose
Over the past year, we have seen significant moves on the part of governments to reform the market structure across a number of infrastructure sectors. This is, in large part, due to a recognition that current market systems may not deliver the investment and efficiencies needed.
Many infrastructure and regulatory leaders are starting to recognize that traditional price-cap regulation – while popular with consumers – may be insufficient to enable utilities and other regulated sectors to meet the growing demand for additional capacity. It’s also because the dynamics of infrastructure and utility markets are changing with the introduction of new generation sources and technology; gaining efficiencies from smart grids and metering, for example, often requires change to regulation
Trends that carry over and are still relevant in 2015
• Governments take action to unclog the pipeline
• The shifting role of multilaterals and development banks
• Cities sharpen their focus on urban mobility
• Striving for better asset performance
New emerging trends expected to make an impact in 2015
• Political and regulatory risks rise up the agenda
• Market reforms: status quo is not fit for purpose
• Big complexities start to impede big projects
• Striking the right balance between necessity and opportunity
• Resource scarcity drives investment
• Infrastructure players go global
“Romania is in a position where it has to fill in the huge gaps in Infrastructure (in particular road and rail ways but equally utilities), in Health, Education, Regional and Urban development, Energy, Restructuring of government administrative capacity and strengthening of state institutions, and a critical role will be played, in addition to the central authorities, by the municipalities’ initiatives to foster such modernization projects through absorption of EU funds at local and regional level. Such projects have a huge potential if one only thinks of the structural funds allocated to Romania and the cohesion funds planned to follow by 2020. The forthcoming period will represent one of the greatest challenges for the public sector, now that the government and the authorities in general are ultimately starting to be rated in terms of economic efficiency, transparency and sustainable performances in streamlining the public services.,” said Nemoianu.
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