London – LAWFUEL – Europe Law Newswire – DLA Piper is delighted to announce the launch of its fifth annual European Public Private Partnership (“PPP”) Report. The report reveals that the European market has recorded double digit growth for the third consecutive year, expanding by 37% from 2005 to 2006. At the same time the aggregate value of projects in tender rose to €73 billion and a pre-tender project pipeline of over €100bn (projects likely to be realised in the next 3-5 years) is predicted.
The report provides a snapshot of activity in each European country market and an overview of the trends in the market in 2007, including year on year league tables and sector analysis.
There are changes in the relative size of current projects markets. For example Spain, fell from second to sixth position this year in terms of value of current tenders, but remains unequalled in terms of the number and value of projects completed. Italy remains top by value of current tenders and fairs well in terms of completing deals. France and Germany have both increased their current markets by over 50% on last year and did equally well on delivery of completed deals, with France having the edge on value per deal. Greece shot into the league tables this time delivering, in one year, a significant value of current projects and two of the largest completed deals in the European market in 2006. The strategic need for capital investment in Eastern Europe shows; with Slovakia, Bulgaria and Romania all making the top ten for current project volume.
“The huge capacity for growth in PPP markets in EMEA is really apparent to our team across the region” said Stefan Eder, Head of DLA Piper’s Finance & Projects EMEA Group. “Even smaller markets like Austria completed the A5 Ostregion PPP road project funded by a wrapped bond in 2006. This has been a watershed, showing that the CEE markets, for example, are able to deliver PPP solutions for some of the biggest infrastructure needs in Europe. DLA Piper, with its 170 practitioners specialising in project finance and infrastructure worldwide, sees this area as strategically important to many of its clients and will further develop and expand its services related to the sector.”
The significant increase in the size of the market represents more countries putting projects into tender and more projects being launched in each country. The road infrastructure sector (including bridges and tunnels) represents 60% of the total market by value which is slightly down on 2005. Rail, waste and water, healthcare and defence sectors are all gaining momentum across Europe.
Angela Brewis, editor of the report, said: “The European PPP market is not uniform. Each country market is at a different place in its development and has a different focus. The UK market focus is now on value at the operational end of projects. At the other end of the spectrum Eastern European countries with high demands for infrastructure are enlisting the EU’s help to set up their project procurement programmes and get their process and legislation right.”
Mark Swindell, head of DLA Piper’s global infrastructure and defence sector, commented: “The report demonstrates that Europe is full of opportunities at a national level for pension funds, insurance companies, infrastructure funds and contractors to invest in the revenue streams from new greenfield assets (backed up by long term partnership agreements with governments) as well as in businesses with regulated physical/technical monopolies.
“The private sector has the confidence to continue to invest in meeting the real needs of European governments which are to substantially improve infrastructure without raising debt or spending tax revenues in the short term and ensure that the risks of designing, building and operating these infrastructure assets are taken by the private sector.”