INTERVIEW – SEE region’s infrastructure needs, strategic location creating business opportunities for Bechtel

“We consider SEE a strategically important region because geographically it connects Western and Northern Europe with the eastern parts of the continent and then onwards with Asia Minor and, increasingly, the Middle East,” David Welch told SeeNews in a telephone interview.

Having started a 600 million euro ($746 million) motorway project in Kosovo, the official said Bechtel is looking for other infrastructure opportunities in the region.

In July, Bechtel was selected alongside Turkish joint-venture partner Enka to build a 60-kilometer motorway linking Pristina to neighboring Macedonia.

Elsewhere in the SEE region, the U.S. company – which has also been involved in motorway projects in Croatia, Albania and Romania – views Turkey as offering a lot of opportunities in the infrastructure sector.

“Turkey is a place where we have done a lot of work historically and would like to do more work in the future. It is a very dynamic infrastructure market that is becoming quite sophisticated,” Welch said.

Looking westwards, the official noted the Adriatic coast today is one of the most interesting tourist destinations in Europe. “There are investors going in there to take advantage of that. Providing the infrastructure that would be supportive of greater mobility in that region would be a great boost to economic development there.”

Unlike when it comes to projects involving oil, gas or power infrastructure which tend to draw private capital, basic infrastructure - motorways, ports, railroads, is an area where governments in the SEE region typically need to take the lead, Welch said.

“This is usually the best way to ensure rapid delivery of the project and support economic development.”

Once governments make those investments in basic infrastructure, then they are able to look at whether they might be privatized or tolled in some manner to provide continuing revenues or immediate recoupment of investment.

“The so-called public-private partnership – which has been used in more mature markets – is typically not a good solution for this particular region,” Welch said.

A much better approach, in his view, would be for a government to decide that its priority is the creation of a certain type of transportation infrastructure and then make the necessary investment using budget funds and perhaps supplement that with financing from credit agencies or similar institutions.

After the completion of the capital investment, the respective government might decide it may be a good idea to make a concession of that infrastructure and recover some of the project costs in that manner.

Welch strongly recommends that SEE governments adopt a long-term approach for capital projects, master planning for up to 10 years ahead. “That would encourage the development of other resources – be that oil and gas or minerals.”

In his view, there is a great deal of unexploited potential in the region. “Bulgaria has very large coal deposits, there is a lot of hydro potential in Albania and there is also a need to find new avenues to import oil and gas, meaning new port and regasification developments. These are the areas where Bechtel sees opportunities in the future.”

($=0.8046 euro)