Game-changing infrastructure

Grandiose infrastructure projects might sometimes seem the stuff of fantasy, but there are a number of schemes currently being built that will have transformative benefits. World Finance picks 20 of the best in 2014

 
Celebrating the best in infrastructure 
February 28, 2014

Every country talks of its various grandiose infrastructure schemes that will be the envy of the world for years to come, but the reality is that many of these fanciful projects rarely get off the drawing board. Recent years that have shown that with a bit of determination – and a lot of funding – the infrastructure megaprojects of tomorrow can be more than just pie in the sky.

The need to drag economies out of the slump of the last five years has also seen calls for large-scale infrastructure spending of the sort not seen (certainly in the developed world) for many decades. While Keynesian approaches to regaining stability have been met with criticism from people concerned about the huge costs of such spending, the advantages and long-term benefits to the wider economy are often enough to draw investment from those countries that can afford it.

Governments the world over are experiencing similar challenges, including the demands of their ever-growing populations, the shifting environmental landscape, and the need to bolster infrastructure in order to sustain economic growth. In order to meet these new demands, governments are investing billions of dollars into breathtakingly large and impressive new infrastructure projects.

Demand for resources such as energy and water has encouraged governments to seek new ways to harness and transport them. These include colossal pipelines, desalination plants, and new mines. Such schemes can catapult previously struggling economies into unthought-of new wealth.

Renewable energy has become an integral part of many governments’ efforts to cut reliance on foreign energy sources and bring down the cost of powering their countries. Mammoth new wind and solar farms are cropping up across the world, helping to harness the abundant natural resources that are part of everyday life.

Another trend of recent years has been the need for a sustainable and efficient means of operating cities. So-called ‘smart cities’ have been sprouting up around the world, with developers promising efficient new ways of powering homes and businesses, cleaner ways of transporting citizens, and innovative methods of cutting emissions. These examples also show how the world’s older, established cities can be modernised for the benefit of the environment as well as their
existing inhabitants.

Transport methods – both intercity and cross-country – lead the way in massive infrastructure projects, as governments and developers see the potential that easing the flow of people brings. Huge sums of money are being invested in new routes that will help people get to their destinations in an easier, faster and, sometimes, cheaper fashion. These apply to both emerging markets, where a lack of infrastructure has hampered economic growth in the past, to developed countries that are looking to boost capacity and update their creaking infrastructure.

World Finance has highlighted below what we feel to be the world’s most impressive and, most importantly, realistic megaprojects that are in various stages of completion. We have looked at schemes from across the world – and across many sectors – and highlighted how the projects have been planned, financed and delivered.

20 of the best

Masdar City

masdar-city

The city will rely on solar energy and other renewable sources, as well as being a zero-waste ecology

Another example of the UAE’s radically innovative projects, Masdar City in Abu Dhabi is a currently under construction low carbon city. Designed by British architectural firm Foster and Partners, the city will primarily rely on solar energy and other renewable sources, as well as being a zero-waste ecology. Due for completion early next decade, Masdar City will be a hub for cleantech companies. Remarkably, it is also aiming to be a sustainable zero-carbon, car-free city. The cost of the project will likely be just under $20bn, and reflects the ambition of the UAE.

Monterrey VI (Conagua)

Monterrey’s water supply is set to get a massive boost with the recent announcement of the Monterrey VI pipeline project. The National Water Commission (CONAGUA) granted permission for the construction of the project that will take around three years to complete, at a cost of around MXN 15bn. The pipeline will stretch around 510km across the state, transporting as much as 5,000 litres per second from the Panuco River and supplying 16 municipalities. This will see an increase in water supply of 33 percent and will guarantee the supply for the next half century to the region’s four million plus population.

GDF Suez Peakers IPP

One of the world’s leading energy companies, GDF Suez, has a rich history dating back as far as the 19th century. With a presence on each of the world’s continents and nearly 140,000 employees worldwide, the company has led the way in developing sustainable energy services. One of its most ambitious projects is the GDF Suez Peakers IPP, which will see two large-scale power plants constructed in South Africa. The 670MW Avon plant in KwaZulu Natal and the 335MW Dedisa plant in the Eastern Cape will both be completed by 2016, helping to power the growth of the country’s industries.

Thika IPP

Increasing the supply of electricity in Africa has been the focus of many development projects in recent years, with an urgent need for power in many communities. In Kenya, the Thika Independent Power Project is helping to transform a region near to the capital of Nairobi. Kenya’s government-tendered three power plants in 2009 with the intention of getting private investment to help spur the industry. The 87MW heavy fuel oil Thika project has seen considerable investment from groups that include the International Finance Corporation, a subsidiary of the World Bank, which has put in nearly €30m.

Bordo Poniente Waste to Energy

Once one of the world’s largest landfill sites, the Bordo Poniente was a vast rubbish dump that, at its peak, received 12,000 tonnes of waste each day. However, in 2011 the government announced its closure, and has since transformed it into an electricity-generating site and a beacon of sustainable and green waste management. The project is expected to cut Mexico City’s entire greenhouse gas emissions by 20 percent over the course of its 25-year lifespan. At a cost of $2bn, the project is expected to generate as much as 250GWh of energy, enough to power 35,000 homes in Mexico City.

Tarahumara Pipeline

pipeline
The sort of project that has the potential to transform an entire region, the Tarahumara Pipeline is the centrepiece of Mexican firm Fermaca’s push into the infrastructure market. Also known as the Chihuahua Pipeline due to the region it passes through, the project was awarded to Fermaca in 2011. Running 380km through the state of Chihuahua, it will deliver gas from the border of El Paso City in the US.

After it’s two-years construction period, the Tarahumara Pipeline will provide a huge boost to the region. Natural gas will be pumped into the region’s industries, helping to fuel growth in other sectors, including manufacturing. It is unique in that it is the only pipeline that connects with the US that is independent of the government monopoly.

With recent regulatory changes to the energy market in Mexico, the pipeline could provide a model for future privately run developments. Fermaca has seen interest from companies both at home and in the US over accessing gas from the pipeline. The company is particularly keen to help foster the growth of local businesses, in part through the lower gas prices for individual users in the Chihuahua region.

DAUVIN (Senagua)

dauvinLast year saw the announcement that Ecuador’s state water provider Senagua (Secretariat Nacional del Agua) would begin development of the Socialisation del Proyecto Sistema Trasvase Daule – Vinces (DAUVIN). The project will pass through the Guayas River Basin and is being managed by Brazilian construction company Odebrecht. It is a mammoth project that will ultimately generate 42MW of power, as well as providing water to thousands of acres of key agriculture across Ecuador. The agriculture sector in Ecuador dominates the economy, and such developments in the country’s infrastructure have been met with great enthusiasm by the farming industries.

London Array

london-array
Britain’s need for a more sustainable and independent energy source has become starker in recent years, with soaring prices and constrained capacity meaning an overreliance on external sources. One of the UK Government’s major efforts to address this problem is through harnessing the considerable winds that batter its coasts. The most significant wind energy project is the London Array, which sits offshore in the Thames Estuary and is the world’s largest offshore wind farm. Construction began in 2009 and the farm began generating power last year. A partnership between energy companies DONG Energy, E.ON UK Renewables, and Masdar, and constructed by Siemens Wind Power, the London Array currently generates 630MW of energy after the completion of Phase One.

Wind farms have proven controversial in the UK, with many campaigners describing them as a blight on the landscape, and the government withdrawing many of the subsidies that were previously offered to potential new farms. However, offshore schemes such as the London Array provide an example of how wind can be successfully harnessed without disruption to local communities. At a cost of £1.8bn, the London Array will cut CO2 emissions in the UK by approximately 900,000 tonnes annually.

Khazar Islands

Khazar Islands

41

Artificial islands

150

Bridges

3,000

hectares

Azerbaijan’s efforts to establish itself as a major player in the global economy has seen it draw up a series of eye-catching projects. The most impressive of these initiatives is the Khazar Islands, a 25km set of artificial islands being constructed in the Caspian Sea just to the south of the capital of Baku. Developed by local firm Avesta, the islands will consist of 150 schools, 50 hospitals, daycare centres, parks, shopping malls, a university and housing for around one million people. It is also set to include a Formula One track, as well as its centrepiece – the $2bn Azerbaijan Tower, which is set to be the tallest building in the world. The total cost of the ambitious project is likely to be around $100bn, and is being funded in part by Turkish, Arab, US and Chinese investors.

Cidade Inteligente Búzios

The first smart city to be constructed in Latin America, the Cidade Inteligente Búzios is a partnership between Spanish electricity firm Endesa and the state of Rio de Janeiro. The project will have smart grids and be fuelled by renewable energies, while electric cars will travel the LED-lit streets. There will soon be 150 LED lights in Búzios, as well as street lighting powered by wind and solar microgenerators. These lights will provide much greater lifespans than current sodium- and mercury-powered lights. The general changes to infrastructure in the city of Búzios will help to encourage the existing 10,000 residents to use energy responsibly and to cut CO2 emissions. The project will last three years in its rollout phase, amounting to approximately €15m.

AlpTransit

alp-transit
With Switzerland sitting at the juncture between Germany, Italy and France, there is an important need for fast and direct transport links between the three countries. As the Alps present an inconvenient barrier for typical motor transport, the authorities have dug vast tunnels through the mountains so that a new rail route can be constructed. The Alp Transit project is a Swiss federal scheme that will see faster rail links across the north-south section of the Swiss Alps. The project is divided into two sections – the Gotthard axis and the Lotschberg axis – which will serve the eastern and western parts of the Swiss Alps.

A hugely ambitious – and expensive – undertaking, the two tunnels were approved in 1999 but will take a considerable amount of time to complete. The 35-mile Gotthard axis is expected to be finished by late 2016. It will be the first transalpine rail link that has a maximum elevation of only 550m above sea level. The Lotschberg axis includes the 21.5-mile long base tunnel, which opened in 2007. The AlpTransit project has cost $13bn to construct, but will ultimately provide a vital transport link across an integral part of Europe, allowing goods and people transportation on a level not before seen in the area.

EMAL Phase II

Dubai’s plan to diversify its economy has seen it invest heavily in harnessing natural resources. One of the main investments is the state owned Emirates Aluminium (EMAL), a smelter project that has established the region as a source of high quality aluminium. Phase two, started in 2011, was completed ahead of time and for less than the $5.7bn predicted cost. The project will provide up to 1.3 million metric tonnes of aluminium per year to 36 countries.

Alqueva Dam

dam
The idea for a large-scale dam project in the south of Portugal was being discussed as far back as the 1950s, but it wasn’t until the 1990s that a decision was finally made to construct one. The Alqueva Dam is a huge arch dam that was completed in 2002. Impounding the River Guadiana, the dam’s reservoir was full in 2012, and provides power to much of the neighbouring region. An initial power station was built in 2004, with the second phase completed last year, with a capacity of 518MW. The Alqueva Dam is one of the largest dams/artificial lakes in Western Europe, and cost $1.7bn to construct.

Bioceánico Aconcagua Corridor

The huge economic potential in Latin America has been hampered for decades by a lack of the sort of modern infrastructure that expanding economies need. Transporting the considerable resources across the continent and its challenging terrain has stumped many, but a massive new project is set to revolutionise freight transport in the region. The Bioceaánico Aconagua Corridor that Corporation America is developing will, once completed, transport rail freight through a base tunnel across the Andes Mountains, from the Pacific Coast to the Atlantic. The benefits of the new link will transform the continent’s saturated transport network, moving huge quantities of freight.

Fujisawa Sustainable Smart Town

While many designers trumpet their own fanciful ideas of what the cities of the future will look like, a recently completed new city in Japan is showing just how practical – and realistic – modern cities can be. The Fujisawa Sustainable Smart Town was finished in late 2013 and offers an insight into sustainable, green and efficient city living, and could provide the template for how cities are designed in the future. Carbon dioxide emissions will be cut by 70 percent, while traffic will not be something that troubles Fujisawa’s inhabitants. Led by electronics firm Panasonic, Fujisawa Sustainable Smart Town has cost JPY 60bn to build and will have 1,000 homes. A town planning body has been set up to ensure that innovation does not dry up once all the primary construction has been completed.

Jakarta MASS RAPID TRANSIT

Jakarta MASS RAPID TRANSIT

2

lines

13

stations

108km

of tracks

Many people are tipping Indonesia as one of the next developing countries to see a sharp upswing in economic growth. The government has been keen to support any potential growth by heavily investing in the country’s infrastructure. The most notable project is the new rapid transit system in Jakarta. The Jakarta Mass Rapid Transit system will drastically improve the lives of the city’s nine million inhabitants. Two lines will serve 13 stations, stretching across 108km and going both north and south of the city. It is currently on target to be finished by the beginning of 2018, and should give the city a much-needed boost.

Akaltara Ultra Mega Power

As India suffers from a chronic lack of power capacity, experiencing frequent cuts and shortages, the government has set about a series of projects that will transform the lives of millions of its citizens. One of the county’s hugely ambitious Ultra Mega Power Projects (UMPP), the Akaltara UMPP will initially provide 3,360MW to the state of Chhattisgarh. Primarily a coal-fuelled plant, the project is due for completion this year, and is part of nine similar power projects across the country. The consortium behind the project, Akaltara Power, has financed it through $2.9bn in loans from 27 banks.

Al Jubail Desalination Plant

Managing the water supply of a country – particularly one in the heart of the scorchingly hot Middle East – is central to many governments’ infrastructure spending as the world gets warmer. One of the largest desalination projects currently being constructed can be found in the city of Al Jubail in eastern Saudi Arabia. The Al Jubail Desalination Plant will see 100,000 cubic metres a day of seawater turned into drinking water. With 50 percent of the kingdom’s water currently coming from desalination plants, the completion of this project – scheduled for the end of this year – cannot come soon enough.

Hyderabad Metro

Currently under construction, [the hyderabad metro] is due to enter service in march 2015

One of India’s largest and most economically important cities, Hyderabad is a key hub for the country’s manufacturing, research and financial industries. The need to provide a modern infrastructure for these burgeoning sectors has led to the construction of a fully automated rapid transit system, known as the Hyderabad Metro Rail. Funded as part of a PPP finance initiative, the Metro will initially have three lines that serve 66 stations across the city. Currently under construction, it is due to enter service in March 2015, and will help to foster yet further economic growth in the growing Indian city.

Shanghai Tower

shanghai-towre
Dubbed the world’s greenest super skyscraper, the Shanghai Tower is a staggeringly tall piece of architecture due to open this year. An example of China’s surge towards modernity and its impressive desire to surpass the structures of rival nations, the Shanghai Tower will soar 632 metres into the sky, have 121 floors, and a combined floor area of 380,000 square feet. The tallest of three super skyscrapers in the Pudong region of the city, the Shanghai Tower was designed by American architecture firm Gensler. Building commenced in late 2008, and it has cost in total $2.2bn to construct. The tower is designed to have nine cylindrical buildings that sit atop one another, with a glass façade covering them. Inside there will be public spaces within each of the nine buildings, with gardens, cafes and retail space, as well as 360-degree views of the city. Its green credentials include the efficient use of materials, with 25 percent less steel used than in other, similar constructions – a portion of its power is generated by wind turbines – and the double layer of glass outside, which reduces the need for air conditioning.