Construction/Infrastructure Opportunity

An Expert's View about Building Products and Construction in Chile

Last updated: 21 Mar 2011

Three decades of economic freedom and incentives for entrepreneurship have made of Chile one of the most dynamic, stable and open economies of the world, with a steady annual growth of 4.5% from 1980 to 2010.

Sector Briefing Construction & Infrastructure Opportunities in Chile Why Chile? Three decades of economic freedom and incentives for entrepreneurship have made of Chile one of the most dynamic, stable and open economies of the world, with a steady annual growth of 4.5% from 1980 to 2010. The average annual inflation rate since 2000 has been 4%. The World Economic Forum's 2010 National Attractiveness for Private Investment Latin America report ranked Chile the highest in the region. The country is also praised for its strong legal framework, with special emphasis on its regulatory efficiency - including public ?The construction industry in Chile has ethics - and for its low political risk. recovered rapidly, lead by extensive government investment: for 2010 Find general information on the Chilean market Government Capital Investment stood at conditions on UKTI's website. The Doing US$95.93 million, the highest in over Business Guide for Chile gives an overview of twenty years..? Chile?s economy, business culture, potential opportunities and an introduction to other relevant issues. UK Trade & Investment Sector briefing: Construction and Infrastructure Opportunities in Chile 9 Prison Package Opportunities The Chilean penitential system has recently The Chilean government?s strong commitment come under criticism due the overcrowding and to infrastructure development continues to poor living conditions for most of the inmates. push the construction industry growth. The The situation was accentuated by delays in government aims to spend USD 14 billion on construction of new prisons by the government infrastructure through 2014, with USD 6 billion in power from 2005 to 2010. The pre-existing coming from the state budget and a further PPP Prison Programmes could be USD 8 billion sought from the private sector complemented by a Modular Prison Scheme, under a PPP portfolio of projects covering a which is currently under evaluation. wide range of sectors. PQQ papers for this package are already The main downside risk following the available (in Spanish only). earthquake could be the higher insurance premiums now facing companies with Group Name M2 Inmates Value infrastructure assets in Chile. The total cost to USD the insurance industry from the earthquake million was estimated to range between USD 4 and Talca 70.000 3.079 122 USD 7 billion. Santiago II 100.000 5.000 174 Public & Private Partnership The February 27 2010 earthquake caused Total 170.000 8.079 296 considerable devastation on Chile's Calama 28.000 1.000 58 infrastructure, with the government valuing the Copiapo 28.000 1.000 58 damage at between USD 20 and USD 30 Valparaiso 42.000 1.500 70 billion. Bio Bio 42.000 1.500 70 With around half of the required post- Temuco 42.000 1.500 70 earthquake construction already completed by Total 182.000 6.500 326 end of 2010, we expect a large number of concession contracts in the pipeline - both yet 9 Santiago International Airport to enter the construction phase and others in Comodoro Arturo Merino Benítez International the study stages - to boost construction growth Airport - also known as Santiago International over the coming years. Airport - is located 15 km (9.3 miles) north- west of downtown Santiago and is Chile's 9 Hospitals Package largest aviation facility and the busiest Twenty four hospitals were either damaged or international air passenger gateway to the destroyed after the last earthquake. The country. It served over 9 million passengers in government announced a package of 8 new 2010, making it the 6th busiest in South hospitals to be awarded as concessions, with a America by passenger traffic. It is the 7th total estimated value of USD 1, 4 billion. busiest airport in Latin America by aircraft movements, serving 104,000 operations. Location Hospital Beds USD million Since the year 2008, the airport terminal has Antofagasta Antofagasta 671 265 operated in excess of its 9.5 million (1,370km north passengers/year maximum design capacity, of Santiago) two years before being expected to reach those levels. The concession is due for retendering in Salvador 640 326 2014 and the Ministry of Public Works (MOP) is Santiago Geriatrico working on a whole new airport master plan Sotero del 785 352 instead of an expansion of the single passenger Rio terminal building, as initially proposed by the Felix Bulnes 500 160 current operator. The feasibility studies for this Region Curico 445 170 master plan will cost USD 9.4 Million. The Del Maule Parral 101 55 expansion must take into account the expected (600km south of Constitucion 131 40 capacity growth to 34 million passengers /year Santiago) Cauquenes 126 65 by 2034 and 50 million passengers/year by Total Investment 1,433 2045. billion UK Trade & Investment Sector briefing: Construction and Infrastructure Opportunities in Chile Group Group II IV Six hospitals in the affected area are under 9 Road Infrastructure construction at this time, of a total of 24 Road building projects dominated the second (including the PPP package). Also, in the first half of 2010, with the government announcing semester of 2011, 10 modular hospitals will be extensive plans to improve the countries road delivered. infrastructure. Five new urban highway concession projects are planned, with If you have any questions on the opportunities estimated total investment of USD 2 billion. above, contact the UKTI contacts named in this The largest of these, the ?Vespucio Oriente? report. Business opportunities aimed highway project in Santiago, should come to specifically at UK companies are added daily to tender in 2011. The USD 1 billion project will UKTI?s website. These leads are sourced by our involve construction of 13km of highway and staff overseas in British Embassies, High an upgrade of Santiago's ring road. Commissions and Consulates, across all sectors and in over 100 markets. Tenders for several other projects were also announced in the early part of the year 2010. You can be alerted to business opportunities on Vial Chile won the ?Camino de la Fruta (Ruta a regular basis by registering on the UKTI 66)? highway concession. Construction of the website. Find out more on UKTI?s business 138km highway is expected to cost USD 360 opportunities service on the UKTI website million. The Nahuelbuta highway project, which will connect southern regions VIII and IX, is estimated at USD160 million and should go out for tender by middle 2011. Under study is the La Serena -Domeyko stretch of Chile?s main motorway, Route 5. MOP estimates that the upgrading and maintenance of 140 km will cost USD 75 million. Other Construction opportunities: February 2010 Earthquake The earthquake in February 2010 affected 75% of the Chilean population. Over 300,000 homes were either damaged or destroyed but only 0.5% of the buildings built since the last earthquake in 1985 suffered damages. What can be expected in reconstruction projects for the remaining of president Piñera?s administration: Housing: In 2010 the government replaced 30,000 homes and repaired a further 70,000. In 2011 it will deliver 220,000 grants and should work on the construction and delivery of over 160,000 new homes. Education: Over 1,000 schools were repaired in 2010. In 2011 and 2012 another 1,000 school will be repaired and 40 rebuilt. Health: 130 hospitals out of a total of 183 reported damages by the earthquake. Over 4,000 beds were lost. UK Trade & Investment Sector briefing: Construction and Infrastructure Opportunities in Chile Major events and activities UKTI contacts Chile Construye Marcia Gattoni http://www.ukti.gov.uk/investintheuk/e Commercial Officer vent/122817.html British Embassy Chile Contact: Marcia Gattoni Tel: +56 2 370 4181 Email: Marcia.Gattoni@fco.gov.uk Email: Marcia.Gattoni@fco.gov.uk Date: May 2011 www.ukti.gov.uk Expo Hospital 2011 Contact: Marcia Gattoni Email: Marcia.Gattoni@fco.gov.uk Date: June 2011 Expo Ambiental http://www.expoambiental.cl/ Contact: Marcia Gattoni Email: Marcia.Gattoni@fco.gov.uk Date: October 2011 New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector briefing: Construction and Infrastructure Opportunities in Chile Next steps - How UKTI can help ? Arranging appointments British companies wishing to develop their ? Organise seminars or other events for business in the Chilean market are advised to you to meet contacts and promote your undertake as much market research and company in the Chilean market planning as possible in the UK. UKTI?s team in Chile, with its wide local knowledge and This work is available via our Overseas Market experience, can provide a range of services to Introduction Service (OMIS) a chargeable British-based companies wishing to grow their service which assists British-based companies business in global markets. wishing to enter or expand their business in overseas markets. This can include: ? Provision of market information To find out more about commissioning this ? Validated lists of agents/distributors work, or accessing other UKTI services and ? Key market players or potential specialist advice, please visit the UKTI website customers in the Chilean market to find contact details for your local UKTI ? Establishment of interest of such office. contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector briefing: Construction and Infrastructure Opportunities in Chile
Posted: 21 March 2011, last updated 21 March 2011

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