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Colombia; an infrastructure boom

Colombia; an infrastructure boom

9 October 2019

Colombia is an exception among its Latin American peers. Economic activity growth is relatively strong, and will accelerate over the coming years, setting it apart from other large economies in the region.

Infrastructure is the key growth pillar

Colombia's construction industry is set to see a strengthening of growth from 2019 supported by robust investment in infrastructure development as well as a recovery in residential and non-residential construction investment from 2020.

Transport infrastructure will be a major focus of investment in Colombia over the next five years supported by the advance of a number of large-scale projects including over 20 road construction projects tendered through the 4G road concessions program as well as a massive Bogota Metro Line 1 urban rail project.

Rail

USD 4.4bn Bogota Metro project is set to be one of the largest infrastructure projects ever developed in the country. Construction of the project will begin in 2020, with planned completion in 2024. Other rail projects in the planning process are:

·   Commuter rail service linking Bogota with Zipaquirá to the north.

·   Commuter rail line linking Bogota with Facatativá to the west. The project is known as the Regiotram del Occidente and would reportedly involve an investment of USD 592m.

·   328.6 km railway linking Puerto Brisas in Dibulla, Guajira with Chiriguana in Cesar. The project would cost USD450m and an additional USD 230m for rolling stock.

Highways:

Road and bridge construction will be a key driver of infrastructure investment in Colombia over the coming years supported by the advance of the large 4G road concessions program. Colombia’s ambitious 4G highway network represents the largest investment initiative in the country. The government’s 4G concession package is worth USD 25bn and includes more than 30 concessions to improve road network. One of the projects currently tendered is the Avenida Longitudinal de Occidente (ALO) South project, a major roadway construction project in Bogota. The project would involve an investment of USD 342m.

Airports:

Airport infrastructure development in Colombia will be a significant focus of infrastructure investment through 2023, with the government planning to prioritize investment in the sector given expectations of strong demand growth over the coming years. Bogota and Cartagena will likely be the primary focus of investment, with privately-backed projects being considered in both metropolitan areas including the expansion of Bogota’s El Dorado Airport and a greenfield airport project in Cartagena.

Construction:

Logistics facilities and malls are set to be among the primary areas of investment in the near term, with a large number of these projects currently under development in the country.

Strong growth expected in the various infrastructure sectors mean that Colombia would remain one of the most attractive markets in Latin America over the coming years.

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Teresa Lehovd is the Head of Market Intelligence at Höegh Autoliners. She holds over 30 years of experience in the RoRo shipping industry, whereof 20 years in various market research positions where she is specialised in the research of global automotive and heavy equipment industries. Teresa is also a guest lecturer at the Norwegian School of Management in the area of Competitive Intelligence and Shipping, and frequent speaker at various industry conferences.



 

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