The subsector of civil works refers to those activities aimed at the construction of land, air, port, fluvial, railway and public services infrastructure. Since 2011, this has been one of the most dynamic sectors in Colombia because of the boost it has received from the Nation, with a 4% share in the National GDP in 2017.
The Civil Works Investment Index (IIOC) is one of the leading indicators of infrastructure. In 2017, the IIOC showed an annual growth of 7.5%, which was mainly due to the positive performance of mining-energy constructions.
Land infrastructure has concentrated around 80%-90% of public investment during the period 2008-2017. According to the National Institute of Roads (Invias), the road transport system has a network of 206,500 kilometers, of which, 9.2% correspond to primary roads, 21.9% to secondary roads and 68.9% to tertiary roads. Therefore, one of the objectives in the medium term is the intervention of 40,000 km-worth of tertiary roads, with investments of COP3.2 trillion, which is equal to approximately US 1.1 billion.
Currently, Colombia has 703 tracks for air transport (between commercial, military, municipal and private airports). At a departmental level, there is 100% coverage and, according to Aerocivil, 11 of these airports are considered international. According to the World Economic Forum (WEF), the country ranks 81st out of 144 countries surveyed, with a rating of 4.1 out of 7 on air transport. Hence, the country holds an average position in Latin America, exceeding the scores of countries such as Brazil (3.9) and Peru (4.1). An investment in the sector is planned between 2018 and 2020 worth COP$ 1.6 trillion.
Two types of port facilities can be observed in Colombia: i) private ports and ii) Regional Port Companies (SPRs) granted by the State under concession. The 2017 WEF report ranked Colombia 77th among 144 countries in terms of port quality (with a score of 3.8 out of 7). Thus, in port matters, the challenges are focused on: improving the articulation of ports-production centers, continuing to promote port infrastructure, promoting logistics development and continuing to strengthen the port institutional framework.
Fluvial & Railway Infrastructure
One of the most important fluvial infrastructure projects in Colombia is focused on recovering the seaworthiness of the Magdalena River, which is estimated to take at least one year between the opening of the new tender and the start of the project. The contract has an estimated investment of COP$ 2.5 trillion. Another outstanding fluvial project is the construction of the new Pumarejo bridge, which with a height of 45 meters (vs. 22 meters today) would allow the entry of larger vessels in the river, as a first step to start using this water network.
In turn, the railway infrastructure has a high dependence on coal behavior. Of the total investment in infrastructure between 2011 and 2017, only 2.4% (COP$ 650,000 million) has been allocated for the country’s railway development; it is estimated that investments of about COP$ 1.2 trillion are required to intervene with the current railways. In the long term, one of the outstanding projects is the “Ferropista” of the Cordillera Central, which includes a 55 km line with a 44.2 km tunnel that goes under the Cordillera Central and connects the populations of Armenia and Ibague.
The transport infrastructure segment in Colombia will grow in the coming years, driven by the progress of the fourth-generation road concession program 4G and the construction of the elevated Metro Line 1 in Bogota.
The 4G concessions program represents the largest investment initiative that Colombia has seen in terms of public infrastructure. The government’s 4G concession package has a value of US 25 billion and includes more than 30 concessions to improve the road network. The government estimates that 4G package projects could increase GDP by 1.5% during the construction phase and around 1% when they begin to operate. After a period of uncertainty created by the Odebrecht corruption scandal, several recent developments indicate that investor confidence is returning, to support new financial closings.
The Bogota Metro Line 1 project – one of the largest transportation infrastructure projects in Colombia’s history and one of the most expensive ones, currently under development in Latin America (US$ 4.4 bn) – will go to the bidding phase at the end of 2018 and its construction will begin in 2019. The project includes the construction of 25.3 km of elevated railways, 15 stations and a railway yard.
Furthermore, the ‘RegioTram’ project (41.1 km) is expected to be completed by 2018, which will connect Bogota with the municipalities of Funza, Mosquera, Madrid and Facatativá, through the modernization of an existing railway and the construction of overhead crossings, to separate railway traffic from a series of main roads. The project will require an investment of approximately US$ 1.4 billion.
Another initiative that is being developed is based on the intermodal Transport Master Plan, which seeks to connect the system of cities through the construction of trunk roads and crossroads that lead to urban centers and ports. A duration of two decades and an investment of COP$ 208 billions is estimated for the development of this project, four times the cost of the 4G program.
By 2018 the infrastructure sector will have major challenges, which include: more financial closings, standard specifications, prior legislative consultations and better contractual management of fourth generation roads (4G).
- The GDP of the sector was 4%.
- The IIOC grew 7% in 2017.
- Colombia has 703 tracks for air transport.
- The 2017 WEF report ranked Colombia 77th among 144 countries in terms of port quality.
- The investment for the Bogota metro is estimated at US$ 4.4 billion.
- An investment of COP$ 1.5 trillion is estimated for the RegioTram project.
- The intermodal Transportation Master Plan seeks to mediate with 19,561 kilometers-worth of roads, with an investment of COP$ 208 billion.
Source: National Association of Financial Institutions (ANIF), National Infrastructure Agency (ANI), National Administrative Department of Statistics (DANE), National Institute of Roads (Invias), Economic Report from Banco de Occidente, Macroeconomic Outlook of Banco Davivienda