2014-03-16 04:32:06 - New Construction market report from Business Monitor International: "Lithuania Infrastructure Report 2014"
There is cautious optimism in the Lithuanian construction sector, bolstered by improvements in the domestic economy and stronger export performance. Although these factors will prove potent enough to help the sector return to positive growth territory in 2013 and 2014, the medium- to long-term outlook will remain less impressive, owing to uncertainties surrounding key transport and energy projects. On the brighter side, its EU membership will attract investors, helping the sector post annual average growth of 3.6% between 2014 and 2023.
Full Report Details at
- www.fastmr.com/prod/779503_lithuania_infrastructure_report_2014. ..
The key projects and developments are:
* Port Expansion: The Lithuanian port sector received a boost from the EUR44mn (US$57.2mn) loan agreement signed between the Nordic Investment Bank (NIB) and the Klaipeda State Seaport
Authority in March 2013. Funding will be used for the reconstruction of quays, the building of a pier for passenger and cargo ferries, as well as dredging and boarding the port's navigation channel. A EUR28mn (US $37.04mn) contract was signed by a consortium between Lemminkainen and YIT in February 2013, to construct an extension to a container terminal at the Lithuanian Seaport of Klaipeda.
* On PPP Road: Out of the six pilot public-private partnership (PPP) projects, one reached financial close in May 2013, when the Palanga bypass was awarded to Kauno Tiltai and Siauliu Plentas. The partners will design, build, operate and finance the project at a cost of EUR36mn over 25 years. Construction will begin by end-2013 and is due to be completed in Q215.
* Power Link Dispute Settled: The much-delayed Swedlit power link project received all the necessary permits from the Lithuanian authorities in May 2013, which will enable construction to start from early-2014. It was announced in October 2009 that Latvia had agreed for Lithuania to host the cable. The link is now expected to be completed by end-2015, compared with the 2012 deadline previously announced.
* Uncertain Nuclear Future: Lithuania entered into renewed talks with Japanese conglomerate Hitachi, as well as Latvia and Estonia, for the 1,350 megawatt (MW) Visaginas nuclear power plant project. However, we remain sceptical about the realisation of the plant in the medium term, owing to the possibility the country will rely on imported liquefied natural gas (LNG), public antipathy to nuclear power and difficulties in agreeing financing.
With an overall score of 52.9 points, Lithuania continues to score significantly lower than the regional average of 55.6 in BMI's Risk/Reward Ratings (RRRs) for the Infrastructure sector in Central and Eastern Europe (CEE). Although its membership of the EU is by far the biggest attraction for potential investors, much needs to be done to improve the structural weaknesses. The legal system is cumbersome, which is why there are frequent delays in settling investment disputes. The government also favours a few select firms in awarding contracts. Low utilisation of EU structural funds is another area of concern.
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