Accelerating progress

Vast levels of investment in infrastructure projects are seen across the Latin American region to encourage growth and development. In Peru, the Public Sector Budget Bill for fiscal year 2025 sees a 4.5% increase from last year, with investment in infrastructure and mining projects expected to help economic growth. With over 80% of investment in Peru being from the private sector, increased public sector activity is expected to enable further opportunities.

Gleeds has joined forces with AECOM and Currie & Brown in a joint venture (UK Healthcare Alliance) as programme manager for two highly complex hospitals in Piura and Trujillo, in northern Peru. Expected to be operational in 2028, the new hospitals will offer advanced diagnostic and treatment options, reducing the need for patients to travel outside the region for high-quality, specialised care.

The programme continues a trend of large-scale infrastructure programmes being delivered through government-to-government agreements, following the success of the Bicentennial Schools Programme (currently nominated for the APM transformation project of the year) and the ANIN programme, formally known as ARCC (winner of the APM project of the year 2023).

Chile is diversifying its economy beyond mining with growing investment in renewable energy, technology and value-added agriculture. It aims to lead in renewable energy, targeting 70% of energy generation from renewables by 2030. Major energy, transportation and digital connectivity projects are financed by public-private partnerships (PPPs).

The Colombian government is focusing on infrastructure as a central pillar of its economic strategy. Significant projects include road expansions, metro systems, renewable energy and digital infrastructure. Similarly, there is also considerable infrastructure investment in Ecuador. The World Bank has approved a new USD 100 million loan to support rural road improvements in the Guayas Province, supplementing a USD 218 million CAF loan to support the implementation of the "Logistics Infrastructure Programme, Phase I," comprising seven road projects.

Estimates show that Panama’s economy grew 6.5% in 2023, driven by the strong performance of sectors such as construction and logistics. Further growth is forecast at an annual rate of 4–5% by 2028, with increased investment from the private sector and large-scale infrastructure projects expected to make a significant contribution along with the expanded Panama Canal.

The construction industry in Venezuela, like other sectors in the country, faces a challenging environment owing to the illegitimacy of the recent election and increasing political repression. Foreign investment is severely limited, hampered by political and economic instability. However, it boasts an abundant array of natural resources, from vast oil reserves to gold, which could be the basis for a substantial recovery if the wider geopolitical environment were to improve, supporting much-needed infrastructure investment.

With such substantial activity and a robust pipeline ahead, it’s hardly surprising that most (60%) of our survey respondents forecast more tender opportunities in 2025 than in 2024. But what considerations are needed to ensure that the much-needed outcomes are delivered?

Four in ten of our survey respondents said they or their supply chain had declined a tender in the past six months, with 35% saying this was due to the proposed conditions and risk profile of the project, 13% expressing it was due to a lack of capacity, and 44% saying it was due to a combination of these factors. In addition, 42% also said some of their projects were affected by insolvency in the last six months. Therefore, it is important to ensure that projects are de-risked as much as possible before tender and that risk transfer is fair to make projects attractive to tenderers. Pain/gain mechanisms can be considered to foster a collaborative project environment.

Given this context, the alliance between the Ministry of Economy and Finance of Peru and NEC to adopt the NEC suite of contracts as the preferred contractual framework for infrastructure projects in the country is very welcome. Nine in ten of participants in our survey believe this will positively impact the delivery of public works.

The NEC suite has already been used for around USD 9 billion worth of public projects, including the Bicentennial Schools Programme. A further pipeline of 70 infrastructure projects should benefit from improved collaboration, transparency and efficient procurement.

Only 11% of respondents said none of the projects they have worked on in the last two years experienced claims or disputes during the contract works, with one in five experiencing claims or disputes on all of their projects. Of those who experienced disputes or claims, nearly half (45%) said the main driver was a poor understanding or lack of contract knowledge; therefore, it will be important that there is sufficient training in the NEC suite to reap the full potential of benefits.

Most respondents said that typical main contractor overhead and profit margins are at the higher end of the range in the current market, with 29% saying they are 10% and 39% saying they are over 10%. This aligns with the results of other questions, which show that there is sufficient work and the supply chain can be selective in what it works on. Overall, higher overhead and profit levels are positive for the industry, enabling investment and innovation, which will be needed to deliver such ambitious investment levels at pace.

Nearly 80% (78%) of respondents said that their projects use modern methods of construction or digital technologies to improve productivity and efficiency during design and construction. Continued adoption will be needed to alleviate labour pressures, ensure quality and make the best use of resources.

Our Gleeds’ Visualise reality capture solution encourages greater collaboration across project teams and provides a comprehensive record. Just under three-quarters of survey respondents said their projects were disrupted due to weather in the last six months, and a quarter of those saw a four-week plus delay. Visualise can help accurately assess the impacts while reducing the number of site visits needed.

Overall, it is an exciting time for the Latin American construction industry, delivering transformational projects that will bring positive change and enrich the lives of local communities. Steps such as embracing innovation and digital technologies and adopting the NEC suite will help ensure the realisation of planned benefits and outcomes.