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Trends in
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KPMG International
kpmg.com/emergingtrends
The trends that will
change the world of
infrastructure in 2018.
Viewed against the disruption, confusion and And the gap between the ‘haves’ and the
uncertainty of the past year, it would be easy ‘have-nots’ has grown wider. Infrastructure
to become despondent about the future of players will need to redouble their efforts and
infrastructure around the world. Yet we see their collaboration if they hope to deliver on the
great opportunity and promise emerging. demands of their citizens and economies.
There is much to be excited about. In this year’s Emerging Trends, we have
Governments continue to demonstrate a strong identified a number of issues and topics that
desire and ambition to invest in infrastructure, carry both pros and cons. Technology could
both as a path to economic growth and as a allow unprecedented progress… or it could
way to hold back the rising tide of populism. fracture our societies further. Politics could
New technologies and rapid innovation are lead to new visions and value… or it could
creating new approaches, models and tools for become more divisive and isolating. Pricing
infrastructure development and helping to bring and funding models could release massive
down costs. The quest to identify new pricing investment… or they could beggar the poor
and funding models offers the potential to and enrich the privileged.
unblock pipelines and unleash a new era of rapid
How accurate are our predictions? Last
development. And new perspectives on key
year, we forecasted that the rise of the
issues such as sustainability, governance and
populist agenda would slow the momentum
investment are driving greater sophistication in
of globalization in the West while the East
many markets. A new dawn may be rising.
consolidated power and pushed for greater
Yet this is no time for governments, regional collaboration. We argued that shifts
investors and developers to relax; great in consumer behavior would change the way
threats also loom on the horizon. The politics service providers prioritize their investments.
of the past year have grown more divisive And we predicted that we would see a greater
and fractured in the West. Institutions have confluence between energy, transportation
lost some of their legitimacy and public trust. and technology.
Trend 4
The pace of development comes under the microscope
Depending on where you live, In contrast, in some developing markets, Over the coming year, we hope to
infrastructure development is either fast particularly where current services are see markets rethink the pace of their
and furious or slow and methodical. Both inadequate, infrastructure is being built infrastructure planning and delivery. In
come with unique challenges and risks. at astounding speeds (think China’s the developing markets, this may mean
development of high-speed rail and slowing down to think more clearly
In the mature markets, infrastructure
what’s been happening in the Middle about project prioritization, suitability,
can take years to move from idea to
East.) New projects — from transport and resilience and sustainability (see Trend
output. Much-needed upgrades and
power through to hospitals and schools — 3). In the mature markets, it must mean
replacements are slow to emerge from
are being delivered almost overnight as speeding up the rate of delivery by
the pipeline (as evidenced by Heathrow’s
governments focus on rapidly responding allowing planning, prioritization, approval
‘third runway’ debate or the continued
to the fast-changing needs of their and delivery processes to become more
lack of momentum on the Brent Spence
economies and societies. But putting the streamlined. In some situations, this may
Bridge Corridor in the US) while other
assets into the ground is often the easy mean balancing democratic process
valuable investments are held up in
part. Knowing which assets should be against efficacy.
multiple layers of planning, approvals
built at which time to deliver the most
and consultations. This is the price of Ultimately, governments will need to
value is much more difficult.
democracy; when major decisions are take a more holistic view of the wider
consultative, progress is often slow. The risk in building infrastructure too benefits they are trying to achieve from
quickly is the threat of building ‘white their investments. As a result, we expect
Given the rapid pace of change now
elephants’ that do not match the current to see a narrowing of the gap in the pace
at play around the world, it is vital that
and future needs of the population they of development of new infrastructure
decision-makers find renewed urgency
intend to serve. Slow-moving projects, recognizing that there needs to be more
in their approach. Many of the greatest
on the other hand, run the risk that speeding up than slowing down. This will
risks in delivering infrastructure are
they will become more expensive — or enable investors, planners and owners to
related to time; reducing the amount of
even obsolete — as they languish on reduce the risk of building infrastructure
time therefore also reduces the risk of the
the planning table (or, worse, during that is sub optimal before it even comes
project (assuming quality standards are
construction). into operation.
maintained).
INSIGHT
The global infrastructure magazine | Issue No. 10 | 2017
This edition offers valuable insights on
the impact of technology on the world INSIGHT
The global infrastructure magazine | Issue No. 9 | 2017
This issue discusses the globalization
of the infrastructure and construction
#InfraTech is here
The future of
infrastructure
Planning in the era
where data is king
A look at the city
of the future
of infrastructure. Globalization
Leading in a
disrupted world
Global operators
in an era of
Investors ponder
new markets
industry including: taking global
infrastructure to local markets, putting
A roundtable with A discussion with A roundtable A roundtable with uncertainty A roundtable with
Darran Anderson, with Peter Auhl, Anahita Arora, A roundtable with Thierry Déau,
Seok Tae Kim and Khalid Koser and Javier Pérez Enrique Fuentes
Stephen Beatty Lord Hastings Fortea and and Ana Corvalán
and Shashi Verma. Page 18 Page 26 Page 12 Page 24
Page 12 Page 18
from around the world on how a vision our world, and how we can work together
the provide, track and measure to create better, more sustainable places
12 different services. The results to live and work.
KPMG International will astound you! KPMG International
kpmg.com kpmg.com
kpmg.com/gcs kpmg.com/gcs
Brazil’s government has announced a sweeping privatization drive that includes everything
sweeping privatization drive that potential it will take more than slick new apps and
investors will no doubt be turning their devices to unlock the benefits of new
from the country’s mint to its state lottery and the country’s largest power generation
utility and potential investors will no doubt be turning their attention to this comprehensive
package of assets before being tendered in the fourth quarter of 2017 and in 2018.
Brazilian President Michel Temer’s goal is to raise critically — concession of 15 port terminals
needed revenue and boost infrastructure investment at a — concession of one brownfield hydro power plant
time when Latin America’s largest economy is struggling to
— concession of 11 greenfield power transmission lines
Foresight/September 2017
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