russia 2016 construction outlook: growing market with usd 300 billion of infrastructure...

RUSSIA 2016 CONSTRUCTION OUTLOOK: GROWING MARKET WITH USD 300 BILLION OF INFRASTRUCTURE MEGA-PROJECTS PIPELINE

BRIKSTATS CONSULTING

MAY 2016

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REPORT KEY HIGHLIGHTS

Russia 2016 Construction Outlook Report is a breakthrough in mapping the growing construction sector in Russia. Russia has a robust infrastructure project pipeline of USD 300 billion to be awarded between 2016 and 2020.

Key highlights of the report: Russia Historical Construction Spend 2010-2015; Russia Forecasted Construction Spend 2016-2020; Construction Spend By Administrative Regions In Russia; Growing number of PPP projects in Russia with PPP Regulations and framework; Russia Infrastructure Projects With Cost Overruns (Budget Overrun); Russia Infrastructure Projects With Time Overruns (Schedule Overrun); Factors resulting in Cost and Time Overruns in Russia; Russia Infrastructure Project Financing Methods, Project Debt Equity Ratio, List Of Top Financiers; Russia Infrastructure Project Returns- Internal Rate Of Return By Sub-Sectors.

Sector Deep Dives – Russia Power Sector Overview, Top Power Project Owners With Market Share, Power Projects by Ownership Type, Top Upcoming and Planned Power projects, Power Projects In Russia With Overruns, Russia Power Sector Internal Rate Of Return (IRR); Russia Railway Projects Overview – Ownership Landscape, Top Upcoming And Ongoing Railway Projects, Railway Forecasted Spend, Railway Sector Internal Rate Of Return (IRR), Railway Projects With Cost Overrun, Railway Projects With Time Overrun; Russia Real Estate – Mixed Use Sector Overview- Market Share Of The Top Developers, Top Mixed Use Projects In Russia And Forecasted Spend In Real Estate

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Table of Content

1: Megaprojects Infrastructure Upcoming Opportunities in Russia: Microscopic View1.1: Overall Megaprojects Spend in Russia: Historically and Future1.2: Megaprojects Spend in Russia By Main Sectors: Real Estate ; Transportation ; Energy, Industrial & Utilities ; Social Infrastructure1.3: Megaprojects Spend in Russia: By Province/ State2: Historical Megaprojects Construction Spending in Russia

2.1: Historical View of Megaproject Spending in Russia on Yearly Basis2.2: Historical View of Megaproject Spending in Russia - On Hold and Troubled Projects

3: Future View of Megaprojects Construction Spending in Russia3.1: Future View of Megaproject Spending in Russia on Yearly Basis3.2: Deep Dive into Megaprojects spending in 2016 and 2017

4: Sector Level Megaprojects Construction Spending in Russia4.1: Historical View of Russia Megaprojects Construction Spending - By Top Sub-Sectors4.2: Future View of Russia Megaprojects Construction Spending – By Top Sub-Sectors

5: PPP in Megaprojects in Russia: Detailed Overview5.1: Overall PPP Growth and Development in Russia: Historical and Future view5.2: PPP Growth in the Russia: By Sectors5.3: PPP Growth in the Russia: By Province/ State5.4: PPP Implementation Models (Concession Type) in Russia5.5: PPP Effectiveness and Efficiency in Russia: Compared to Other Countries

6: Public and Private Ownership Share in Russia Megaprojects development6.1: Overall Ownership Trend6.2: Private Sector involvement and the Development Model6.3: Private and Public Ownership: By Sectors (Excluding PPP)

7: Assessing Project risks in the Russia Megaprojects landscape7.1: Megaprojects Cost Overruns/ Variations in Russia7.2: Megaprojects Cost Overruns/ Variations in Russia: Reasons and Factors7.3: Megaprojects Time Overruns/ Variations in Russia7.4: Megaprojects Time Overruns/ Variations in Russia: Reasons and Factors

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Table of Content (cont..)

8: Recent and Strategic Trends in the Russia Megaprojects8.1: Greenfield versus Brownfield Megaprojects Investments in Russia8.2: Increasing Average Megaprojects Size in Russia

9: Russia Megaprojects Financing: Prime Sources of Project Financing and Project Debt and Equity Ratios9.1: Russia Megaprojects Financing: Project Financing Debt to Equity Ratio at Sector Level9.2: Russia Megaprojects Financing By Type of Institutions

10: Russia Megaprojects Returns (IIR- Internal Rate of Return) and Impact Analysis10.1: Russia Megaprojects Return Analysis using Internal Rate of Return (IRR): By 'Main' Sectors10.2: Russia Megaprojects Return Analysis : Economic and Social Impacts

11: Russia Megaprojects Construction : Key Sector Deep Dives11.1: Russia Megaprojects Sector Deep dive: Power Sector Assessment

11.1.A: Power Sector - Historical Megaprojects Construction Spending in Russia11.1.B: Power Sector - Future View of Megaprojects Construction Spending in Russia11.1.C: Key Owners and Investors in Russia’s Power Sector

11.2: Russia Megaprojects Sector Deep dive: Railways Sector Assessment11.2.A: Railways Sector - Historical Megaprojects Construction Spending in Russia11.2.B: Railways Sector - Future View of Megaprojects Construction Spending in Russia11.2.C: Key Owners and Investors in Russia’s Railways Sector

11.3: Russia Megaprojects Sector Deep dive: Mixed Use Sector Assessment11.3.A: Mixed -Use Sector - Historical Megaprojects Construction Spending in Russia11.3.B: Mixed -Use Sector - Future View of Megaprojects Construction Spending in Russia11.3.C: Key Owners and Investors in Russia’s Mixed -Use Sector


Table of Figures (cont..)

Figure 1: Russia Breakdown of Megaproject Spending - By Project StatusFigure 2: Russia Historical Megaprojects Spending - By SectorFigure 3: Russia Upcoming Megaprojects Spending - By SectorFigure 4: Russia Megaprojects Investment - By ProvinceFigure 5: Russia Split of Historical Megaprojects Investment: By Province and By Main SectorsFigure 6: Russia Split of Upcoming Megaprojects Investment: By Province and By Main SectorsFigure 7: Russia Split of Troubled Megaprojects Investment: By Province and By Main SectorsFigure 8: Russia Projects Awarded Value On Yearly Basis: From 2010-2015Figure 9: Russia Troubled Projects (On Hold or Cancelled) Value On Yearly Basis: From 2010-2015Figure 10: List of Key Projects Put on Hold or Cancelled with project detailsFigure 11: Russia Projects Awarded Value On Yearly Basis: From 2016- 2020Figure 12: Russia Megaprojects Spending by Key Sectors from 2016-2020Figure 13: List of Top Projects To be Awarded in 2016 and 2017 with project detailsFigure 14: Russia Projects Awarded historically : Split by Top 6 Sub SectorsFigure 15: Russia Projects to be Awarded in Future : Split by Top 6 Sub SectorsFigure 16: Russia PPP Megaprojects Construction: By Project StatusFigure 17: Russia Ongoing and Planned PPP Megaprojects Construction: By Award YearFigure 18: List of top Ongoing and Upcoming PPP ProjectsFigure 19: Russia PPP Versus Non-PPP Megaprojects Construction: By SectorsFigure 20: Russia PPP Historical and Upcoming Megaprojects Construction: By SectorsFigure 21: Russia PPP Versus Non-PPP Megaprojects Construction: By Province/ StateFigure 22: Russia PPP Historical and Upcoming Megaprojects Construction: By Province/ StateFigure 23: Russia PPP Megaprojects Construction – By Concession TypesFigure 24: Russia PPP Megaprojects Construction – By Concession Types and By SectorsFigure 25: Russia Upcoming PPP Megaprojects Spending along the PPP readiness index: Compared to Developing CountriesFigure 26: Russia Historical, Troubled and Upcoming Megaprojects –By Ownership Type (i.e. Public and Private companies)Figure 27: Russia Private Sector Owned Megaprojects by Status: Split by Ownership Model (JV / Partnership/ Standalone)Figure 28: Russia Megaprojects By Ownership Type and By Sectors


Table of Figures (cont..)

Figure 29: Russia Share of Megaprojects Undergoing Cost Overrun: Compared to other countriesFigure 30: Russia Share of Megaprojects Undergoing Cost Overrun: By Main SectorsFigure 31: List of Big 5 projects Undergoing Cost Revision with project detailsFigure 32: Russia Megaprojects Cost Overrun: Reasons for Cost Overruns and Corresponding Impact On Cost Change %Figure 33: Russia Share of Megaprojects Undergoing Time Overrun: Compared to other countriesFigure 34: Russia Share of Megaprojects Undergoing Time Overrun: By Main SectorsFigure 35: List of Big 5 projects Undergoing Time Revision with project detailsFigure 36: Russia Megaprojects Time Overrun: Reasons for Time Overruns and Impact On Timely Delivery, YearsFigure 37: Russia - Greenfield versus Brownfield Megaprojects Investments – Historical, Troubled and UpcomingFigure 38: Russia Greenfield versus Brownfield Megaprojects Investments – By SectorsFigure 39: Russia List of Big Greenfield Projects Planned in 2016, 2017Figure 40: Russia List of Big Brownfield Projects Planned in 2016, 2017Figure 41: Russia Megaprojects Average Project Size: By Sub-Sectors (Granular sector level)Figure 42: Russia Megaprojects Projects Financing - Debt to Equity Ratio By SectorFigure 43: Russia List of Projects with Key Sponsors, Lending Institutions, Debt & Equity valueFigure 44: Russia Megaprojects with Average Internal Rate of Return (IRR): By SectorsFigure 45: List of Key Upcoming Megaprojects with Target IRRFigure 46: Russia List of Key Ongoing and Upcoming Megaprojects: With Social and Economic ImpactsFigure 47: Russia Power Project Contracts Awarded : From 2011-2015Figure 48: Russia Share of Spend By Power Projects On hold and Cancelled ProjectsFigure 49: Russia Power Project Contracts To Be Awarded : From 2016- 2020Figure 50: List of Top Power Projects To be Awarded in 2016 and 2017 with project detailsFigure 51: Share of Public Versus Private Sector in Russia Power SectorFigure 52: Private Participation in Power: Split by Partnership Model TypeFigure 53: Market Share of Top Key Project Owners of Russia Upcoming Power ProjectsFigure 54: Russia Railways Project Contracts Awarded : From 2011-2015Figure 55: Russia Railways Project Contracts Awarded From 2011-2015 : Split by Type of RailsFigure 56: Russia Share of Spend By Railways Projects On hold and Cancelled Projects


Table of Figures

Figure 57: List of Key Railways Projects Put On Hold with project detailsFigure 58: Russia Railways Project Contracts To Be Awarded : From 2016- 2020Figure 59: Russia Upcoming Railways Project Contracts To Be Awarded: Split by Type of RailsFigure 60: List of Top Railways Projects To be Awarded in 2016 and 2017 with project detailsFigure 61: Share of Public Versus Private Sector in Russia Railways SectorFigure 62: Market Share of Top Key Project Owners of Russia Upcoming Railway ProjectsFigure 63: Russia Mixed -Use Project Contracts Awarded : From 2010-2015Figure 64: Russia Mixed -Use Project Contracts To Be Awarded : From 2016- 2020Figure 65: List of Top Mixed -Use Projects To be Awarded in 2016 and 2017 with project detailsFigure 66: Share of Public Versus Private Sector in Russia Mixed -Use SectorFigure 67: Market Share of Top Key Project Owners of Russia Upcoming Mixed-Use Projects


Historically, Energy had a sizeable amount under PPP construct, however, the pipeline is only

XX% of the total PPP spend and ~XX% in the transport sector


Source: BrikStats Megaprojects Database, Team Analysis

Figure 20: Russia PPP Historical and Upcoming Megaprojects Construction: By Sectors

PPP Investment By Sector and StatusUSD billion

Historical Upcoming Total PPP spend

Historical Upcoming Total PPP spend

ENERGY, UTILITIES AND INDUSTRY TRANSPORT

10%19%

Petersburg has the highest percentage of value spent on PPP projects, primarily due to high

investments in the transport sector. Others include Moskva and Saha Republika with ~XX%

PPP share



Figure 21: Russia PPP Versus Non-PPP Megaprojects Construction: By Province/ State

Regional Split of project spend by PPP and Non PPP projects, %

MOSKVA ADYGEYA,RESPUBLIKA

LENINGRADSKAYA OBLAST'

SANKT--‐PETERBURG

PRIMORSKIY KRAY SAHA, RESPUBLIKA

KRASNODARSKIY KRAY

Non PPP PPP

The prime contributing factor delaying the on-time delivery of a project is the inability to

source required funding or find potential investors and this has led to time overruns as high as XX years of delays


Figure 36: Russia Megaprojects Time Overrun: Reasons for Time Overruns and Impact On Timely Delivery, Years


FINANCING MULTIPLE LOCAL MARKETCONDITION

DESIGN/ PLANNING REGULATORY CONSTRUCTION

Reasons for time overruns and Impact on Time Overruns (Years)

Megaprojects in Russia will get even more complex with approximately XX% increase in

average project size that is likely to impact other market dynamics



Figure 41: Russia Megaprojects Average Project Size: By Sub-Sectors (Granular sector level)

Average Project Size

USD billion

MINING

POWER

EDUCATION

RESIDENTIAL

PROCESS INDUSTRIES

ROADS

RAILWAYS

OIL & GAS

MIXED USE

Planned Historical

Russia has a very attractive internal rate of return on megaprojects, averaged at XX%. Of this,

transport sector has maximum returns with average target IRR of XX%



Figure 44: Russia Megaprojects with Average Internal Rate of Return (IRR): By Sectors

Target Internal Rate of Return (IRR) By Sector, %

AIRPORTS

RAILWAYS

ROADS

PORTS

PROCESS INDUSTRIES

OIL & GAS

MINING

Average = XX%

USD billion

-

10

20

30

40

50

60

70

80

2005 2008 2009 2013 2014 2015

Historical Project Awards - By Construction Start Year

Railways had smaller investments till 2013 when the Government intensified its focus on

developing the countrywide rail network system. From 2013-2015, ~XXX billion worth of

projects got awarded for construction



Figure 54: Russia Railways Project Contracts Awarded : From 2011-2015

∑= $ XX B

∑ =$ XXX B

BrikStats Infrastructure Report Centre

The Infrastructure Report Centre publishes multiple

reports on different topics at a sector or a

geographical level. These reports are based on a

bottom up approach through projects garnered

under the proprietary tool – BrikStats

Megaprojects Database, to draw in-depth view

on the infrastructure sector at different levels. It

helps in developing an inside out perspective

through validated statistics and analysis

sponsored by expert views and industry outlook.

Our reports address key questions relevant to

different stakeholders involved in a project:

• Formulating internalization or expansion

strategies, i.e. companies entering or plans to

enter a specific geography

• Enable existing companies to increase their

market share or enter new sub-sectors

• Find business leads and plan business

development goals through in-depth industry

analysis along with 2-5 year forecast

• Mitigate risk and exposure by understanding

the project related challenges and other

policies and government behaviour

• Understand current competitors or new

entrants and their strategies

BrikStats Infrastructure Report Centre: Special and

Customized Reports

The Infrastructure Report Centre publishes reports

on Special topics like Global PPP trends, Regional

Market Outlook, Global Megaprojects Cost and

Time Overruns and many more, that can further be

made in a custom-built report. These topics could

be on any specific area related to the

construction or infrastructure market.

In the customized reports, we offer our clients

unique benefits of getting access to information as

required by them at a special price. Under our

build to suit model, BrikStats provides bespoke

research services combined with our industry

expert inputs to bring distinctive insights on the

requested topic. Our team has exclusive access to

internal tools that enables us to provide content

driven research and statistics on construction

market.

About BrikStats Consulting

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research services, designed to plug

existing data and information gaps by

offering more comprehensive coverage

of the global infrastructure projects. We

combine real time information with an

industry experts’ viewpoint to bring

intelligent insights, thereby enabling

different companies involved through the

project lifecycle, to drive business growth

and manage their risks and returns. We

help in finding new business and

empower clients to make faster and

effective business decisions.

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russia 2016 construction outlook: growing market with usd 300 billion of infrastructure...

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