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About us Members Positions Issue November 2017
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Dear Reader,

All presentations and photos from last month's EIC Autumn Conference in Paris are now online

The Spring Conference will be held on 19-20 April 2018 in Vienna with a workshop on what will make up a successful international contractor in the year 2025.

Sincerely,
Your EIC Team

Headlines
EIC 2016 Statistics: International Turnover declines from Peak Level

International turnover of European contractors affiliated to EIC's Member Federations was slightly lower in 2016 at €172 billion, down 5% compared with 2015 – when turnover peaked at €180 billion. Read more...


EIC 2017 Autumn Conference: The Global Infrastructure Funding Gap

More than 100 participants attended the EIC Autumn Conference in Paris where a distinguished workshop panel discussed the causes for the current massive gap in global infrastructure funding and possible scenarios to overcome this lack of funding. Read more...

 

EIC collaborates with DRBF to establish benefits of Dispute Boards on international projects

EIC is collaborating with the Dispute Resolution Board Foundation (DRBF) to establish the benefits of Dispute Boards on international projects. Against that background, we would like to encourage member companies to provide feedback on their experience with Dispute Boards to the DRBF. Read more...


News from Bruessels
EU kick-starts new EU External Investment Plan

On 28 September 2017, the European Parliament and the Council adopted the European Fund for Sustainable Development, the heart piece of the EU's new External Investment Plan (EIP). Read more...


Multilateral & International Issues

OECD Consultation on Export Credits

On 14 November 2017, EIC participated with three members of its Working Group “Export Credits” to the consultation meeting on export credits work at the OECD. Read more...

Brief Notices

Launch of the new FIDIC Red, Yellow and Silver Books

FIDIC have confirmed that their new contracts will be released, distributed and
discussed at the FIDIC International Contract Users' Conference on 5-6 December 2017 in London - a 20% saving is available here.


EY 2017 European Round Table for Construction & Infrastructure

EY is holding the 16th edition of its European Construction,
Engineering & Infrastructure Round Table on 13 December 2017 in Madrid. The event brings together a network of European Directors within the industry to discuss current
trends and developments. Read more...


Members' Corner

Italian International Contractors: Twelve years of rising turnover

ANCE ANCE

EIC's Italian Member Federation ANCE conducted a survey on the international presence of Italian construction companies. International turnover of the 30 companies that took part in the survey has grown steadily over the past twelve years, from €3 billion in 2004 to €14 billion in 2016. Read more...

 
Headlines

EIC 2016 Statistics: International Turnover declines from Peak Level 

Berlin   International turnover of European contractors affiliated to EIC's Member Federations was slightly lower in 2016 at €172 billion, down 5% compared with 2015 – when turnover peaked at €180 billion.

Lower Turnover in Europe, the Middle East and Latin America

This drop in international turnover is mainly due to lower turnover in Europe, the Middle East and Central and South America. International turnover in Europe fell by 4% to €72 billion. In the Middle East, the drop was steeper as turnover fell by 17% to € 20 billion, thus correcting the comparably high value of the previous year. In Central and South America revenues came to €11 billion, down 15% year-on-year.

Revenues in North America and Africa, however, were stable at €29 billion and €15 billion respectively. Turnover in Asia, Oceania and Australia combined rose by 8% to €26 billion.

French contractors continue to lead the field

In 2016, French contractors continued to lead the field with a total international turnover of €36 billion, followed by German contractors with €25 billion and Turkish contractors with €22 billion.

However, when looking at business outside of the OECD countries, Turkish international contractors contributed the largest share of turnover with €17 billion, followed by French contractors with €10 billion and Italian contractors with €8 billion.

Links:
EIC 2016 Statistics: Turnover
EIC 2016 Statistics: New Contracts

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Headlines

EIC 2017 Autumn Conference: The Global Infrastructure Funding Gap

Paris   EIC held its Autumn Conference in Paris with a workshop on “The Global Infrastructure Funding Gap – Why it exists and how it can be overcome”.  More than 100 participants attended the EIC General Assembly and Workshop on 12-13 October 2017 in Paris where a distinguished workshop panel discussed the causes for the current massive gap in global infrastructure funding and possible scenarios to overcome this lack of funding.

Increasing difficulty to build a pipeline for large projects

Following an introduction by EIC President Philippe Dessoy, the speakers of the first panel, Christian Jabre of KPMG Corporate Finance, Salim Bensmail of the French Ministry for the Economy and Finance, Alessandro Carano, Member of Cabinet of the EU Commissioner for Transport and CICA Representaive Roberto Morrison analysed the reasons behind the funding gap in different world regions. Besides the need to keep up with world-wide growing GDP and population, speakers also identified the increasing difficulty to build a pipeline for large projects.

Prerequisites for Investments

Workshop Session 2 focussed on the prerequisites for investments into infrastructure and the roles institutional players such as the EU and the AIIB could play in order to enhance funding for infrastructure both in developed and in developing countries. Speakers included Michael Watson of Pinsent Masons, Eugène Zhuchenko from the Long-Term Infrastructure Investors Association, AIIB’s Procurement Advisor Ian Nightingale, DG DEVCO’s Roberto Ridolfi and Rima Le Coguic of Agence Française de Développement.

All speakers emphasised the task for the development policy to provide the right tools to “crowd-in” private finance. In this context, the presentation of the European Commission on its new EU External Investment Plan was of particular interest.

Links:
Conference Presentations

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Headlines

EIC collaborates with DRBF to establish benefits of Dispute Boards on international projects

Berlin   EIC is collaborating with the Dispute Resolution Board Foundation (DRBF) to establish the benefits of Dispute Boards on international projects. Against that background, we would like to encourage member companies to provide feedback on their experience with Dispute Boards to the DRBF.

Multilateral Development Banks request further statistical evidence

The primary purpose of the survey is to provide the Multilateral Development Banks with reliable statistics on the rates of success of Dispute Boards and thereby, to persuade them to be more active in encouraging Employers to properly use the Dispute Board processes.

Early findings established by DRBF suggest that when a standing Dispute Board is established early in the project and it practices active dispute avoidance, there are far fewer disputes. Moreover, when the Parties ask for non-binding opinions from the Dispute Board the same matters rarely come back to the Dispute Board for binding decisions. This suggests that the matters are settled based on the non-binding opinions.

Links:
DRBF Survey Template

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News from Bruessels

EU kick-starts its new EU External Investment Plan

Brussels  On 28 September 2017, the European Parliament and the Council adopted the European Fund for Sustainable Development (EFSD), the heart piece of the EU's new External Investment Plan (EIP). The EIP will support more inclusive and sustainable development in Africa and the European Neighbourhood. Its aim is to boost public and private investment and thus address some of the obstacles to growth in our partner countries and of the root causes of irregular migration.

Moving ahead with the EIP's rapid implementation, the Strategic Board of the European Fund for Sustainable Development (EFSD) met for its first meeting in Brussels on the same day. The EFSD Strategic Board includes the EU Member States and the European Investment Bank, as well as the European Parliament as observer.

Investment Windows define priority sectors for the EFSD Guarantee

At its first meeting the Strategic Board discussed rules of procedure, strategic orientations and proposals for concrete areas for investment, the so-called "investment windows". These windows define priority sectors for the EFSD Guarantee, identified as essential for the creation of decent and sustainable jobs in Africa and the EU Neighbourhood.

The first investment windows are expected to be approved shortly, so that the EIP can start to make a real difference for beneficiaries on the ground. At the launch stage, five windows are considered essential:
-    "Sustainable Energy and Sustainable Connectivity": targeting sectors such as renewable energy, energy efficiency and transport, enhancing energy security and sustainable development, while addressing climate change risks and helping countries deliver on their commitments to implement the Paris Agreement.  
-    "Micro, Small and Medium Enterprises (MSMEs) Financing"
-    "Sustainable agriculture, rural entrepreneurs and agroindustry"
-    "Sustainable cities": exploring innovative mechanisms to address the challenges of sustainable urban development faced by partner countries.
-    "Digitalisation for Sustainable Development".

Links:
DG Devco Website on EIP

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Multilateral & International Issues

OECD Consultation on Export Credits 

Paris   On 14 November 2017, EIC participated with three members of its Working Group “Export Credits” in the consultation meeting on export credits work at the OECD. The purpose of the meeting was to enable an exchange of view between OECD governments and export credit agencies with industry federations and civil society organisations on issues relating to officially supported export credits.

BIAC calls upon OECD to modify “Consensus” quickly

As part of the BIAC (Business and Industry Advisory Committee to the OECD) delegation, EIC representatives explained why the restriction of official support for local costs to 30% of the export contract value was no longer appropriate. BIAC called upon the OECD to quickly change the so-called  “OECD Consensus” and to enable export credit agencies to provide insurance for local costs up to the same amount as the export contract value across all sectors.

BIAC advocates new Sector Understanding for EPC and Construction Projects

In addition, BIAC proposed to establish a new sector understanding on large construction and engineering (including EPC) projects, which recognised the fact that the export of engineering and construction services require a much higher amount of local costs then of other goods and services.

Present OECD governments and export credit agencies did not enter into a detailed discussion but agreed to review the BIAC proposition internally in order to come to a consensual position in 2018.
Other topics that were discussed during the consultation related to the implementation of the Sector Understanding for Rail Infrastructure, ECA support for coal-fired energy projects in the light of the Paris Agreement and a potential revision of the OECD’s 2006 Recommendation on Bribery.

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Picture Credits: aroxopt / fotolia.com

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