Government and private sector must work together to meet infrastructure demand

According to a KPMG Global Construction Survey, “lack of leadership by government” and “lack of private sector initiative” emerged as the most significant barriers to infrastructure development in an industry that is facing increasing demand.

“Governments at all levels are tightening their belts, but as major urban areas strain to support growing populations, the need for infrastructure is growing,” said Brad Watson, partner and head of KPMG in Canada’s Global Infrastructure Advisory practice. “The survey results show that industry is expressing its frustration with the obstacles that currently exist. Through our work, we are seeing greater synergies between the public and private sector, which is encouraging more private sector investment.”

The report also found that infrastructure is so vital to growth that even the most cash-strapped governments will inevitably give it a higher priority—or face a drastic change in lifestyles for their people. Worldwide the expected cost for infrastructure over the next forty years is approximately US$70 trillion.

The Great Global Infrastructure Opportunity surveyed 161 engineering and construction companies around the world with revenues ranging from US$250 million to more than US$5 billion. The survey found that:

  • Public-Private Partnerships (P3s) are most likely to be focused on energy and transportation projects;
  • 80 per cent believe government is showing lack of leadership over infrastructure development;
  • 49 per cent of respondents expect their backlogs to increase from 5 to 15 per cent.

While respondents reported that their revenues grew in 2011 from 2010, 71 per cent of respondents cite economic uncertainty as their biggest ongoing concern, followed by a skills shortage (31 per cent) and thirdly, government deficits (30 per cent).

“The construction and engineering sector is facing a shortage of skilled workers, which puts a major strain on the industry,” said Lorne Burns, Partner and National industry Leader, Real Estate. “The up-side to this shortage is that this demand creates a great opportunity for firms and individuals with these skills to capitalize on the vast number of opportunities around the world.”

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