Greater competition for investment in transport as China and India open up, says report

Competition for international private investment in transport and other infrastructure is intensifying as China and India open their markets, KPMG claims in a new report.

The report on global infrastructure market trends highlights how China is shifting to open market tenders, publishing a pipeline of more than 2,000 public-private partnership projects, while India is also "becoming a force to be reckoned with," with growing influence in professional services. "The centre of gravity in the global infrastructure market is fundamentally shifting towards the East." 

The report also says that "more and more equity is entering the infrastructure market, meaning that competition for 'investable' infrastructure projects has reached fever-pitch". This is driving down yields that investors can achieve, it says, prompting investors to finance a wider range of projects, including higher-risk greenfield projects, and projects in 'frontier markets' such as Myanmar and Mongolia.

"This is good news for project owners around the world, as access to equity starts to increase," it adds. However, it warns that greater government intervention in infrastructure markets for improved risk, has made some projects "more complicated and less attractive to investors". But KPMG believes that in 2016 governments will start to unclog pipelines by taking steps to attract private finance.