Bullish sentiment on recovery prospects

The scale of any anticipated upturn in civil engineering work looks likely to remain at least partially constrained by continuing uncertainty over how long the world will take to get Covid-19 under control and resume normal industrial activity, according to some project logistics providers. There is also the related issue of how much finance will actually be available from cash-strapped governments and the private sector for investment in infrastructure projects.

The net result is that the current overall demand for global civil engineering project logistics services is patchy, with some industry markets and geographical areas doing better than others. Austria-headquartered transportation group Felbermayr has 27 operational subsidiaries providing transport/lifting technology and civil/structural engineering for infrastructure projects throughout Europe and worldwide.

Reluctance to invest

Wolfgang Schellerer, the company’s general manager, said: “There are some projects happening in the infrastructure sector but at the moment there is a reluctance to invest in private industry projects because people remain uncertain about the further impact of Covid-19.”

Ruedi Reisdorf, ceo of Swiss global forwarder Fracht, which is involved in civil engineering projects in Asia, Australia, North and South America, and Africa, highlighted a few specific examples of the present variations in activity levels across different parts of the market.

“Sectors such as infrastructure, utilities and industrial plant are seeing more or less steady demand in all regions of the world. However, with leisure activities hit hard by Covid-19 and most existing facilities empty, now is not the right moment for new projects in that sector,” he reported.

Geographically, Africa is generally currently a bit slow when it comes to new infrastructure and other civil engineering projects, which is a surprise when you consider the predictions for growth there as recently as 18 months ago. That is because everyone is now first looking to invest ‘at home’ in more creditworthy industrial nations, so reducing the availability of overseas finance for projects in Africa.”

A senior executive with Omega Morgan, a North American heavy rigging and transportation provider currently engaged in several accelerated bridge construction projects, also expressed a mixture of caution and optimism.

“We are not seeing an increase in construction activity yet. We are, though, noticing an increase in requests for quotation (RFQ) and requests for proposal (RFP) from companies in the civil engineering industry which we hope will translate into work in the coming years,” reported Erik Zander, the company’s chief operating officer.

On another positive note, Zander also played down the suggestion that governments and the private sector might be short of finance for investment in infrastructure projects, at least as far as his company’s key geographical market is concerned.

“Here in the Pacific Northwest [of North America], the funding is available – it is just a question of getting the designs completed and putting projects out to the market. Anything the US federal government brings to the table in that context will be the icing on the cake,” he stated.

Generally, logistics providers servicing the worldwide civil engineering industry appear increasingly optimistic that basic infrastructure projects will, over the next few years, form a key part of the economic recovery from the impact of Covid-19 in many parts of the world.

Projects resuming

The Netherlands-based global heavy lift services provider Mammoet, which is involved in many civil engineering projects worldwide – most of them related to the renewal of urban infrastructure – shared this view.

Its recent projects have included the decommissioning of the Samuel De Champlain bridge in Montreal, Canada, and the installation of new landmark bridges such as the Donaubrücke over the Danube River in Linz, Austria, and the new bowstring bridge access to Madrid Airport’s T4 terminal in Valdebebas, Spain.

“The fact that we seem to be starting to see the light at the end of the Covid-19 tunnel is indeed triggering the resumption of delayed projects,” commented Rafael Martinez, branch manager in Madrid – one of Mammoet’s core engineering centres for civil projects.

“Moreover, it is presumed that the global impact of the pandemic in all economic sectors may induce the appearance of stimulus investment packages by governments worldwide, which in many cases are expected to be related to infrastructure and other civil engineering projects, including structural modifications, renewals and newbuilds.”

There are some projects happening in the infrastructure sector but at the moment there is a reluctance to invest in private industry projects… – Wolfgang Schellerer, Felbermayr

Gert Hendrickx, sales director projects for Belgium-based Sarens, expressed similar optimism. The company’s activities in support of the civil engineering sector include an average of one bridge installation a week, ranging from smaller bridges weighing a few hundred tonnes to megastructures of 3,000 tonnes or more, and other infrastructure works.

We have not really had a downturn in infrastructure-related projects globally,” he reported. “What was booked and planned for execution continued, mostly as per planning, although sometimes with small delays because of Covid-related travel restrictions for our crew. Looking ahead, we are now seeing increased demand for the preparation of quotations for civil construction works, mainly in Europe and the USA.”

Change in perspective

Stuart James, chief commercial officer for UK heavy/abnormal load transport and logistics service provider Osprey, also shared insights about potential government-backed infrastructure investments. “Here in the UK, we believe the government’s response to Covid-19, in addition to its ambitious commitment to climate change, could impact some civil engineering programmes. Rebuilding the economy and stimulating growth will require a change in perspective regarding which projects should now take priority.”

In that context, he continued, access to data that identified the most-needed scenarios might help. “Understanding what needs to be built, where and why, is a science in its own right, although private and public sector finance will always be found for the right projects,” he added.

Osprey’s recent involvement in the civil engineering sector includes working on a wide variety of national infrastructure projects – one, for instance, involved transporting a 5,200-tonne, single-span concrete portal to take a rail line over a road.

Fracht’s Reisdorf echoed positive sentiment about the likely impact of increased government investment in infrastructure. “Governments all around the world will invest heavily with borrowed money to get their economies up and running again – and what better areas are there for that investment than infrastructure and renewable energy,” he stated.

Emre Eldener, managing director of Kita Logistics, a Turkish international logistics service provider, was also bullish about the prospects ahead. “Covid-19 has slowed down levels of activity in the civil engineering sector over the last 12 months but some large infrastructure projects have continued regardless of the pandemic – for example, here in Turkey we have the Dardanelles suspension bridge [officially named the Çanakkale 1915 Bridge] in the north-west of the country which when completed will be the one of the longest suspension bridges in the world,” he commented.

Governments … will invest heavily with borrowed money to get their economies up and running again – and what better areas for that investment than infrastructure and renewable energy. – Ruedi Reisdorf, Fracht

Kita’s involvement with major infrastructure projects includes the Marmaray tunnel underneath the Bosphorus linking the European and Asian sides of Istanbul, the mobilisation of equipment for major road-building schemes across Eastern Europe/Central Asia, and supporting Turkish construction contractors operating in various parts of the world, particularly Russia and the CIS region.

“Looking ahead, we believe there will be a more general increase in civil engineering industry activity in Turkey and internationally during the second half of this year as the effects of Covid-19 hopefully diminish.”

When it comes to identifying specific industry sectors where demand for heavy lift/forwarding services to support civil engineering projects is expected to be particularly strong over the next few years, Mammoet’s Martinez suggested urban infrastructure renewal and replacement is likely to be an “interesting” market.

“Many transport infrastructures are either reaching the end of their lifecycle or require significant upgrades or enlargements to accommodate the necessities of current population growth and increasing transport demands,” he commented.

Crumbling infrastructure

“That trend is already evident in the USA, for instance, where about 10-15 percent of transport infrastructure like bridges is reaching the end of its service lifespan. Former US administrations were focused on that issue and so is the current government, which has made a clear statement that fixing America’s infrastructure is a priority.”

In addition, continued Martinez, “we are noticing an important increase in civil engineering project demand in Central and North Europe, including Scandinavia, the UK, Germany and the Netherlands, focused on transport infrastructure”.

“Another potential interesting market is that associated with new high-speed train developments taking place in several countries such as the UK and USA, for example.”

This article has been taken from the May/June 2021 edition of HLPFI.