Market Watch: Infrastructure projects during COVID and beyond

Posted by The CCC Team on February 28, 2022 at 4:00 AM

International infrastructure projects continue to present compelling opportunities for Canadian firms — but the economic impacts of COVID-19 have changed what it takes to win deals. The pandemic has accelerated the shift to public–private partnership financing models, requiring Canadian companies to turn up their game and bring new kinds of offerings to the table.

The move to public–private partnerships (3Ps) has been underway for years, allowing governments to transfer risk to the private sector and distribute the financial burden of large-scale initiatives. But now as they pour funds into healthcare and economic recovery in the midst of COVID-19, many governments can no longer afford to do infrastructure any other way.

“COVID has been the number-one priority for every government to deal with,” says Christian Dechamplain, CCC Director Infrastructure and Construction. “Healthcare has placed a great deal of financial strain on governments, and yet infrastructure needs are always there. So we’re seeing countries that have never done 3P partnerships now doing 10 to 15 a year.”

 

How Canadian companies can adapt

For Canadian companies to be competitive in this new environment, they need to bring money and financing to the table. “Governments expect both a technical and financial solution to projects,” says Dechamplain. “Make sure you identify your funding sources in the proposal to show that your bid is viable, appealing and bankable.”

Beyond partners with project cash, governments also want to do business with companies that are ready to provide community benefits, whether by sharing IP, manufacturing locally or employing local workers.

“It’s no longer about bringing in your own workers, equipment, materials,” Dechamplain says. “Hire local partners, help grow the tax base and raise incomes on the ground.” Even if this is not a technical requirement of a specific bid, including localization can boost the chance of success.

Companies with sufficient means can also take the burden off of governments by investing in pre-feasibility studies and market research before putting together proposals. “Governments aren’t able to fund this sort of foundational work anymore, and they may be impressed that you’ve taken the initiative,” Dechamplain explains.

 

Zero in on emerging opportunities

As government spending priorities shift, different kinds of infrastructure projects are moving to the front burner. Two burgeoning areas today are water and transportation.

“Water is growing as a sector in Africa and the Caribbean,” Dechamplain says. “It’s historically been neglected, and now governments are playing catch-up and fulfilling electoral promises. It could be a big one for the next 20 years.” COVID-19 has intensified the need for modern water infrastructure with requirements for handwashing and safe, locally available potable water.

Transportation is also key. The pandemic has forced the reconfiguration of supply chains, so governments are looking at things like hubs for storage in-country to reduce the need for long-haul trucking.

“It’s always been an important sector,” says Dechamplain, “but now there’s even more focus as restrictions and disruptions force shipping networks to adjust.”

 

The Canadian advantage

Canada is known around the world for expertise in engineering and infrastructure. The country also has a strong reputation for honesty and openness — which is an important draw as governments around the world increasingly prioritize transparency in their business deals. “Our brand is strong,” says Dechamplain, “and it’s time to take advantage of these opportunities.”

Canadian companies are very busy at the moment with infrastructure projects at home. Some may think they don’t have the capacity to take on international work. But because infrastructure projects can take years to develop, it’s important to get started today building international leads for the near future.

“Eventually the projects in Canada will slow down,” Dechamplain says, “and companies need to be positioned to maintain or grow their revenue by doing international projects.”

 

How CCC can help 

CCC offers a number of services to help customers pursues government procurement opportunities. For significant foreign government contracts, CCC offers International Prime Contractor Service where the CCC assumes the role of prime contractor for the project and provides international government buyers with a Government of Canada guarantee that the contract will be delivered.

The service allows Canadian businesses to differentiate their procurement proposal. It also saves time and money in the bidding and award process, enabling companies to close the deal faster. For more information about how we can help, contact us via email or call 1-800-748-8191.

Tags: Construction and Infrastructure

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