FOR ABERTIS INFRAESTRUCTURAS, the great recession that followed the financial crisis was the turning point in terms of the strategic direction of the business.
It brought with it a panoply of challenges including a restricted supply of credit to public administrations, atypical economic cycles and low inflation in our main markets.
We had to adapt to this new environment quickly and we did it by prioritising international growth and by focusing the business plan on the area where we had the greatest know-how – toll road management.
After a long reorganisation process, today Abertis is the world leader in this sector, measured by the number of kilometres we manage, with over 8,300km all over the world. Today, 70% of Abertis’s business is outside Spain, making us a truly global company with operations across Europe, North America and Central and South America.
A HUGE INVESTMENT CHALLENGE
Although the economic environment has improved since the depths of recession, clear challenges remain.
Public administrations are still suffering credit restrictions, but infrastructure requires ongoing maintenance and development if countries want to remain competitive and continue to grow.
And the levels of investment required are vast. For example, the American Society of Civil Engineers calculates that USD1.4tn is needed to fund transport infrastructure between now and 2025 in the U.S. alone.
We believe that meeting this investment challenge should continue to drive public–private collaboration in the sector.
It’s encouraging that many countries, such as France, Chile and Brazil, are preparing ambitious infrastructure programmes that will offer interesting opportunities in the short term to fund assets that will remain in place to serve society for generations to come.
Given this investment requirement it’s not surprising that the infrastructure sector is becoming increasingly attractive to investors. But it’s important to remember investing successfully in this sector also requires significant management know-how and a long-term vision.
In the case of the toll road sector, we often talk of contracts and concessions with a lifespan of over 25 years, preceded by significant initial investment. To succeed in this sector, management companies need the industrial strength and financial solvency to weather the different economic, political and social cycles in the countries where they invest.
PRIORITY ROUTES TO GROWTH
We have clear priorities in terms of selecting which markets to invest in. We target those countries that offer a clear regulatory framework, legal certainty and favourable funding and yield conditions, and where we feel our investment in toll roads can add real value in terms of securing both economic and social progress.
Abertis now operates in 12 countries in Western Europe and America. These are economically developed countries but, in terms of infrastructure funding, they offer significant investment opportunities in existing networks – in other words, brownfield concessions. These are regions where we feel comfortable to operate.
Regions such as Asia and Africa have a greater need for new infrastructure or greenfield developments. These are less suited to the current Abertis business model. But, as a world leader in the toll road sector, we are obliged to analyse all of the opportunities offered by the infrastructure sector all over the world, provided they meet our legal and financial discipline conditions.
One of our priorities when deciding to invest in a country is legal certainty and a clear regulatory framework.
During the long lifespan of concessions it’s not unusual to see significant political, economic and social change. Managing that change requires two things in particular: that we remain flexible and adaptable as a company, and that public administrations maintain a stable legal framework in which we can operate.
I would love to see a broader move towards stable and more homogenous regulation offering clear guarantees with respect to public–private collaboration on infrastructure development.
There has been some significant progress on this front, but we believe that much still remains to be done.
The fact that toll roads are public assets managed by a private company is an added complexity.
All over the world, Abertis works with different authorising bodies, partners with different characteristics, different types of shareholder, as well as a variety of customers, suppliers and partners.
Getting this right can be tricky. But bringing together the different interests of the many stakeholders requires, above all, management based on trust, professionalism, a long-term vision and a clear desire to serve society.
It also calls for a high degree of agility on our part. And I think we are achieving this in three ways.
Firstly, through an open, global culture in which our international divisions have a high degree of freedom to act independently, so that they have the ability to be flexible and adaptable but always within the context of a group of companies that remain in constant communication and are closely aligned.
Secondly, by unifying and simplifying our processes we’ve been able to generate significant synergies for Abertis as a whole and for our individual business units.
Finally, we have also always opted for innovation. Our recently rebranded Emovis toll technologies division will, I believe, continue to give us tremendous competitive advantage in our chosen markets.
For anyone operating in this sector one issue remains a significant and worrying problem – road safety. This is a real priority for Abertis and it’s one area where I’d like to see significant progress.
I always begin my meetings with each of our business units by going over the accident rates on our networks. Our work with associations such as Together for Safer Roads is just one example of our commitment to addressing this global problem.
We have a clear goal in this respect. As part of our goal to bring both economic and social benefits in the markets we serve, we want to establish Abertis as the world leader in road safety knowledge and best practices.