Developing Markets

Infrastructure Activity in Economic Crisis

Steve Filipov

Key Messages
Pace of economic development is directly impacted by the ongoing financial crisis but long-term, underlying drivers remain intact Infrastructure investment has been slowed in places but, onbalance, continues despite (if not because of) the economic crisis Infrastructure opportunities are global but, near term, will be strongest in countries who have the fiscal capacity and the policy mindset to fund aggressive stimulus Global infrastructure is an important opportunity for companys like Terex who have a portfolio of capabilities and the ability to execute globally
2

What is a Developing Market?

0607 Growth in Real GDP/Capita (i.e., development) 15%

$25k/head Developing Developed China

A DEFINITION Low but increasing prosperity

High Growth

10%

India Russia Poland

Increasing construction spending Increasing commodity consumption Conditions favoring sustained, long-term growth

5%

US Mexico Brazil

Moderate Growth

Low Growth
$20 $30 $40 $50 $60

0%

($10)

$0

$10

GDP/Capita (i.e., prosperity)

-5%

W. Europe Japan

N. America Asia

ANZ E. Europe

M. East Latin America

Africa

Source: Analysis of data from the Economist eiu; Bubbles represent countries. Bubble size is proportioned to country GDP

Whatis a a Developing Market? What is developing market?

08 09 Growth in Real GDP/Capita (i.e., development) 15%

$25k/head Developing Developed

Clearly a more challenging new eraat least for now Global crisis has hit all markets - some developing markets have been hit particularly hard Much depends on the ability of governments to respond and respond effectively Infrastructure is both an important lever and an important long-term priority

10%

High Growth China Moderate Growth

5%

India Poland

Russia
$20 $30 $40 $50 US

Low Growth
$60

0%

($10)

$0

$10

Brazil
-5%

GDP/Capita (i.e., prosperity)

W. Europe ANZ

N. America M. East Japan E. Europe

Mexico Japan

Africa Asia Latin America

Source: Analysis of data from the Economist eiu; Bubbles represent countries. Bubble size is proportioned to country GDP

-10%

Situation by Market (BRIC)

CHINA
1 8.0% 1 4.0% 1 0.0% 6.0% 2.0% -2.0% '97'98 '99 '00 '01'02 '03 '04 '05'06 '07'08'09 '1 0 -6.0% -1 0.0% -1 4.0% -1 8.0% 1 8.0% 1 4.0% 1 0.0% 6.0% 2.0% -2.0% '97 '98'99 '00 '01'02 '03'04 '05'06 '07'08'09 '1 0 -6.0% -1 0.0% -1 4.0% -1 8.0%

INDIA

Situations range from troubling (China) to downright grim (Russia) China is best positioned but will deteriorate if growth slows further India faces significant challenges struggling to grow, despite government intervention Sharply lower outlooks in Brazil, as industrial conditions weaken and consumption slows Russia has been hit hard and continues to fight downward pressure on its currency, as it struggles to restore economic growth

BRAZIL
1 8.0% 1 4.0% 1 0.0% 6.0% 2.0% -2.0% '97'98 '99 '00 '01'02 '03'04 '05'06 '07 '08'09 '1 0 -6.0% -1 0.0% -1 4.0% -1 8.0% 1 8.0% 1 4.0% 1 0.0% 6.0% 2.0%

RUSSIA

-2.0% '97'98 '99 '00 '01'02 '03'04 '05'06 '07 '08'09 '1 0 -6.0% -1 0.0% -1 4.0% -1 8.0%

Real GDP Growth:

History + Jun 08 Forecast

Feb/ Mar 09 Forecast

What has Changed? 1. Global economic expansion has clearly experienced a set-back 2. All notions of decoupling look ridiculous in hindsight the world is as connected as ever, perhaps more so 3. Risk level is clearly elevated and will remain that way until the flow of global capital is restored

What hasnt Changed? 1. The pursuit of greater prosperity continues 2. The path to prosperity remains clear:

Solid foundation for economic activity (i.e., infrastructure) Well functioning economic and regulatory frameworks Governments that are free of corruption and allow every individual to advance according to their abilities

1. There is no free lunch

If it seems too good to be true, it still is Nothing lasts forever

What is being done? (G20)

Large Stimulus Plan

Source: Brookings Institution

Modest Stimulus Plan

Small Stimulus Plan

Stimulus by Market (G20)

Country Saudi Arabia USA China Spain Germany Canada Korea S. Africa Indonesia Japan Australia Russia United Kingdom Argentina Mexico France Brazil India Italy Turkey Total 2009 Spending $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 17.6 268.0 90.0 18.2 55.8 23.2 13.7 4.0 6.7 66.1 8.5 30.0 37.9 4.4 11.4 20.5 5.1 6.5 4.7 692 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Incremental Spending on Economic Stimulus by Country: G20, $B Total % of GDP ('09) % of GDP (total) 49.6 841.0 204.0 75.3 130.4 43.6 26.1 7.9 12.5 104.4 19.3 30.0 40.8 4.4 11.4 20.5 8.6 6.5 7.0 1,643 3.3% 1.9% 2.1% 1.1% 1.5% 1.5% 1.4% 1.3% 1.3% 1.4% 0.8% 1.7% 1.4% 1.3% 1.0% 0.7% 0.3% 0.5% 0.2% 0.0% 1.7% 9.4% 5.9% 4.8% 4.5% 3.4% 2.8% 2.7% 2.6% 2.4% 2.2% 1.8% 1.7% 1.5% 1.3% 1.0% 0.7% 0.5% 0.5% 0.3% 0.0% 4.8% Emphasis Education, Infrastructure Infrastructure, Social Programs, Tax Cuts, Bailouts Infrastructure/ Reconstruction, Social Programs Tax Cuts, Mortgage Relief, Infrastructure, Auto Industry Tax Cuts, Infrastructure, Auto Industry Tax Cuts, Housing, Infrastructure, Social Programs Infrastructure, Tax Cuts, Industry Support Infrastructure, Social Programs Tax Cuts, Infrastructure, Fuel and Power Subsidies Tax Cuts, Tax Refunds, Earthquake Proofing Tax Refunds, Infrastructure, Tax Cuts, Job Creation Corporate Tax Relief Tax Cuts, Capital Spending, Social Programs Loan Subsidies, Infrastructure Price Supports, Layoff Prevention, Infrastructure Tax Relief, Auto/ Other Industrial Support, Infrastructure Tax Cuts Financial System, Infrastructure Loan Guarantees Tax Cuts, Social Programs Negotiating with the IMF

Excludes infrastructure that was already planned

Source: Brookings Institution + Terex analysis

Infrastructure as a priority
Infrastructure as Economic Stimulus The story remains the same: the global economy Is running a major infrastructure deficit as the cost of decades of underinvestment is now surfacing. Whats changing are the numbers. Estimates regarding the demand for infrastructure money are revised upward almost on a daily basis. The latest estimate suggests that the global economy will see between $25 and $30 trillion of fresh infrastructure investment in the coming two decades. In the US, we will see close to $150 billion a year of new infrastructure investment in coming decade, in Europe roughly $300 billion a year and in China, no less than $200 billion a year. Roughly 40% of this money will go to transport and almost one-third to power facilities (see chart)
Source: CIBC World Markets

10

China
POPULATION BY REGION (08): 1.3 B*
Northeast (5%)
HEILONGJIANG JILIN HEBEI BEIJING SHI Beijing TIANJIN SHANXI SHANDONG GANSU XIZANG Chengdu SICHUANCHONGQING HUBEI SHAANXI HENAN ANHUI JIANGXI JIANGSU Shanghai SHANGHAI SHI ZHEJIANG Shenyang LIAONING

West (2%)

XINJIANG NEI MONGOL

South Central (15%) North Central (10%) Southeast (23%)

QINGHAI

NINGXIA

Shanghai Inland (28%)

Bohai (18%)

HUNAN GUIZHOU YUNNAN

FUJIAN TAIWAN

Guangzhou GUANGXI GUANGDONG HONG KONG MACAU HAINAN

GDP BY REGION (08): $ 4.6 T*

Northeast (4%) South Central (8%) North Central (8%) Shanghai Inland (32%) Southeast (23%) Bohai (24%) West (2%)

21 % of world population but only 7 % of global GDP as of 2008 Most of the current economy is centered in three regions along the eastern coast of the country Consumption in these three regions also drives the economies further inland, where much of Chinas agriculture and commodity industries are centered Major investments in infrastructure continue to drive strong economic growth, with maturity of the Chinese economy not likely until after 2030

* Hong Kong, Macau, and Taiwan are not considered part of China above see Southeast Asia

11

China Infrastructure
CHINAS 4T RMB ECONOMIC STIMULUS TARGETING INFRASTRUCTURE (NOV. 2008)
Independent Innovation (.16 T, 4%) Healthcare/ Culture (.04 T, 1%)

60% 50% 40% 30% 20% 10% 0%

RESERVE TO GDP RATIO (2008) Capacity for more

Welfare Housing (.28T, 7%) Environment (.35T, 9%) Transportation/ Electricity (1.8T, 45%)

Brazil

S. Africa

Germany

UK UK

China

Rural Infrastructure (.37T, 9%) Earthquake Rebuilding (1T, 25%)

180% 160% 140% 120% 100% 80%

Capacity for more

Germany

~1/3 is new spending Also, confirms commitment to previous projects

60% 40% 20% 0%

Brazil S. Africa Saudi China India Russia Japan US

Russia

DEBT TO GDP RATIO (2008)

Japan

Saudi

India

US

12

China Example
China Strategic Project: Earthquake Rebuild
Key Facts

Total Investment: $235 Billion in total Covered area of 132,596 square km, population of 19.8 Million Includes earthquake rebuild, new infrastructure, tourism and other projects that is beneficial to regional economic development

Sample of Projects
Dujiangyan-Yingxiu Expressway Rebuild: 1B Qingchuan County rebuild: 0.6B Beichuan County rebuild: 1.6B Quang minority cultural site building: 1B Jiulongmen international tourism site: 6B Chengdu International Logistic Park: 2.8B Earthquake Museum: 0.39B
Source: Public Source

13

China Example
China Strategic Project: Beijing-Shanghai High Speed Railway
Key Facts

Total Investment: $32.3 Billion Total Length: 1318 KM, 21stations including Beijing, Tianjin, Jinan, Bengbu, Nanjing, Wuxi, Jiangsu and Shanghai. Designed speed: 350 km/h 5 hours from Beijing to Shanghai Construction period Commencement on April 2008, put into operation in 2010

Equipments & Contractors

$4.4 Billion budget for purchasing construction equipment China Railway Engineering Co.: 40% of the total construction China Railway Group: 26% of the total Sino-Hydro: 17% China Communication Construction: 16%
Source: Public Source

14

China Example
China Strategic Project: West to East Power Transmission
Key Facts

Total Investment: Over $77.4 Billion 3 Channels: North line from Inner Mongolia and Shaanxi to North China; Central line form Sichuan to Central and East China; South line from Yunnan, Guizhouand Guangxi to South China Covered areas:Guizhou Yunnan, , Guangxi, Sichuan, Inner Mongolia, Shanxi, and Shaanxi Transmission area: Guangdong, Shanghai, Jiangsu, Zhejiang, Beijing and Tianjin. Construction period: 2001 -2010

Source: Public Source 15

China Example
China Strategic Project: South to North Water Diversion
Key Facts
Total Investment: $71.4 billion Project Scope:

East-line-from low reach of Yangtze River to Tianjin of 1,156km. Mid-line-from middle reaches of Yangtze River to Beijing and Tianjin of 1,267km. West -line-transfer the water from upper reaches of Yangtze River to upper reaches of Yellow River. East line and Mid line has started construction. The approved investment for the first phase reached 254.6 billion Yuan 4.16 Billion RMB for East line and 18.23 Billion for Mid line has already been invested in December 2008
16

Source: Public Source

Terex and China Infrastructure

17

India
Indian claim
JAMMU AND KASHMIR HIMACHAL PRADESH

POPULATION BY REGION (08): 1.3 B*

Northeast (4%)

CHINA

Chandigarh

PAKISTAN

UTTARANCHAL

HARYANA DELHI

New Delhi RAJASTHAN

UTTAR PRADESH

NEPAL
Gangtok BIHAR JHARKHAND WEST

ARUNACHAL PRADESH ASSAM NAGALAND MEGHALAY

East (24%)

North (31%)

BANGLADESH GUJARAT MADHYA PRADESH

BENGAL MIZORAM

CHHATTISGARAH

BURMA

South (21%)

MAHARASHTRA Mumbai (Bombay) ANDHAR PRADESH GOA KARNATAKA Bangalore TAMIL NADL KERALA LAKSHADWEEP

ORISSA

West (20%)

Rangoon

GDP BY REGION (08): $ 1.2 T

Northeast (3%)

East (17%)

17% of world population but only 2 % of global GDP as of 2008 Economic activity is fairly evenly distributed but heavily concentrated near major cities Tier 2 cities are rapidly emerging centers for investments Recent high rates of growth are slowed by the financial crisis but above average growth is expected to continue long-term as more of India enters the modern world

North (28%)

South (26%)

West (26%)

18

India Infrastructure
300 PPP projects, across sectors, are at various stages of implementation, with total project costs currently assessed at around USD 21.33 B
Sector Airports Energy Ports Roads Railways Urban development No of projects Project costs (M $) 6 32 38 186 3 35 4,008 3,560 2,763 9,511 201 1,287

Total

300

21,330
19

India Example
Indian ports to be modernized to handle increased load with additional investments from private and public sectors Under consideration: Mumbai, Chennai P&O terminal, Jawaharlal Nehru Port Trust Enore, Mundhra and Pipavav
Planned Capex
(11th Five Year Plan)

Total

Major Ports

Non Major Ports

Total Investment
Thru Pvt Sector Thru Govt

$18,266 M 100% $11,080 M

$12,156 M $6,110 M 67% 33% $7,373 M $3,706 M

$ 7,186 M
$4,782 M $2,404 M

20

India Example

21

India Example
66,590 km of National Highways, with Govt continuing its phased initiatives to upgrade and strengthen them through the National Highway Development project ( NHDP)
Phase Phase 1 Phase 2 Phase 3 Phase 5 Phase 6 Phase 7 Length (km) 7,498 6,647 4,035 6,500 1,000 700 Estimated Cost $ 6,000 M $ 6,868 M $ 10,867 M NA $ 3,336 M $ 3,336 M Status 95% complete 70% complete In progress To be tendered To be tendered To be tendered
22

India Example
Kolkata Airport
Estimated Cost: $ 400 M Completion: 2011 Est Passenger traffic: 20 M Scope of Work: Extension of secondary runway, construction of rapid taxiways and aprons, up gradation of air traffic management, brand new integrated terminal building, communication, navigation and surveillance systems

Chennai Airport
Estimated Cost: $ 360 M Completion: 2011 Est Passenger traffic: 14 M Scope of Work: Extension of runway, suitability for operation of larger aircraft , upgrade of air traffic control systems and brand new terminal building

23

India Example
Kashmir Railway Project
Route Length: 290 Km Gauge: 1676 mm Stations: 30 Scope: 158 Bridges, 20 tunnels Longest tunnel: 11km Max speed - 100km / hr One bridge will be the highest railway structure in the world.

24

Terex and India Infrastructure

25

Russia/CIS
POPULATION BY REGION (08): 285 M
The Stans (21%)

Estonia Latvia Lithuania Vistula Belarus

Russia
Western CIS (29%)
Ukraine Kazakhstan

Russia (50%)

Georgia Armenia Azerbaijian Kyrgyzstan Uzbekhistan Turkmenistan

GDP BY REGION (08): $ 2.2 T

The Stans (7%)

4 % of world population and 4% of global GDP as of 2008 Prior to the global financial crisis, Russia was experiencing rapid growth as the state utilizes natural resource wealth to modernize the economy with infrastructure investment Neighboring countries benefited from Russias growth and (in the Western CIS) increasing trade with eastern and western European neighbors Agriculture and commodities dominate the economies of The Stans, whose contribution to regional GDP is currently modest
Western CIS (19%) Russia (74%)

26

Russia/CIS Infrastructure
Federal Capital Budget for Transportation Infrastructure
16 14 12 RUR (billions) 10 8 6 4 2 0 2006-2010 2010-2015 1.314 13.484

The Federal Capital budgeting documents planned a 10x increase in transport infrastructure spending prior to any stimulus plan. Russian stimulus amounts to a 25% increase in Federal spending However, Russian government response to crisis is to focus on supporting companies, potentially resulting in the delay of infrastructure investment Transport Ministry announced on January 22 the establishment of the State Transport Leasing Company with authorized capital of RUR 40 buillion ($1.2 bn) for the purpose of leasing approximately 10,000 units of construction equipment from Russian manufacturers.

Updating of Transportation System of Russia (2002-2010) Development of the Transportation System of Russia (2010-2015)

CONSTRUCTION AND RECONSTRUCTION OF AUTOMOBILE ROADS 2003-2015, KM

3,987 3,993 3,381 2,572 2,210 3,142 3,166 2,624 2,695 2,984

CAGR 6.4%
2,313

2,008

2,031

2003

2004

2005

2006

2007

2008 plan*

2009 plan

2010 plan

2011 plan

2012 plan

2013 plan

2014 plan

2015 plan

* 2008-2009 Targets of the Automobile roads 2006-2010; 2010-2015 Targets of the Development of the Transportation System of Russia (2010-2015)

27

Russia/ CIS Infrastructure

Investment Fund spending (main source of infrastructure project financing) is slashed by almost half in 2009 from approx.$3.6 B to $2 B Federal projects of national importance are cut from 21 to 15, which will be also financed from budget funds (approx. $11.3 B) Despite Russias cut-backs, several major projects will continue:
The Western High-Speed Diameter road in St.-Petersburg The development of Lower Angara region The building of transport infrastructure in the Chita region (Baikal region) Oil refineries in Nizhnekamsk (Volga region) Oil terminal in Ust-Luga (NW region) Others

Event-driven projects in the region are also likely to continue, including investments supporting the APEC Summit in 2012, the World University Games in 2013, and the Sochi Olympics in 2014
Source: RosBusiness Consulting

28

Russia/CIS Example
APEC Summit 2012 (Vladivostok) Contribution to the development of the Asian Pacific Economic Conference in 2012 in the city of Vladivostok.
Location: Russia, Vladivostok, Russky Island The governance of Russian State institute of urban planning and investment development Giprogor (Russia). The total program includes: Conference Center,International Press Center, Theatre and Opera House, Hotels, World Trade Center, Exhibition Center,Oceanografic Museum, Medical Center, Sports Facilities, Shopping Mall and Parking Facilities, the extension and reconstruction of new highways, the airport, and harbors.

Source:http://www.royalhaskoning.ru/en-us/projects/Pages/VladivostokSD.aspx

29

Russia/CIS Example
World University Games 2013 (Kazan)

Estimated budget: USD 8.6 B (Start 2009)

30

Russia/CIS Example
World University Games 2013 (Kazan)

48 sport facilities to be built (in total about 400,000sqm) 5 new metro stations Reconstruction of Kazan ring road and airport
31

Russia/ CIS Example

Olympic Games 2014 (Sochi)

Estimated Budget: USD 14 B (Start in 2009) Olympic Stadium, (40 thousand seats) Curling Ice Arena (3 thousand seats) Olympic Skating Center (figure skating 12 thousand seats). Olympic Oval - Speed Skating Centre (8 thousand seats) Bolshoi Ice Palace Ice Hockey, 12 thousand seats Ice Arena - Ice Hockey (7 thousand seats)
32

Russia/ CIS Example

Olympic Games 2014 (Sochi)
Sport facilities 20 units Roads 147,5 km Motorway bridges and road interchanges 12 units. Railway roads 88,6 km Engineering infrastructure 55 units Communication Facilities 10 units Heat generating stations 2 units. Chain of powerplants 1 units. Substations 11 units. Substations to be refurbished 7 units. High voltage power lines 550 km Environmental protection facilities 6 units Hospitals 2 units Hotels 33 units Offices 1 units
33

Terex and Russia Infrastructure

34

Latin America Situation

MEXICO CUBA HONDURAS GUATEMALA EL SALVADOR COSTA RICA NICARAGUA PANAMA TRINIDAD AND TOBAGO VENEZUELA GUYANA FRENCH GUIANA COLOMBIA ECUADOR PERU BRAZIL SURINAME THE REPUBLIC OF PUERTO RICO

POPULATION BY REGION (08): 570 M

Southern Cone (21%)

Brazil (33%)

Central Am./ N. South Amer. (27%)

BOLIVIA PARAGUAY

Mexico (19%)

CHILE ARGENTINA URUGUAY

GDP BY REGION (08): $ 4.1 T

Southern Cone (18%)
Central Am./ N. South Amer. (20%)

FALKLAND ISLANDS

9 % of world population and 7% of global GDP as of 2008 Brazil and Mexico represent over 60% of regional GDP Recent political and financial stability in these and other countries has enabled strong growth in the region High commodity prices and successful development of the regions mineral and oil reserve also contributed

Brazil (37%)

Mexico (25%)

35

Brazil Infrastructure
PAC Growth Acceleration Project
A Five-Pillar Programme

Infrastructure
Credit and financing promotion

Total investment

Until 2010
12%
Logistics US$ 58.2 B

After 2010

US$ 506 B

US$ 285 B* US$ 221 B

Enhancing the investment climate

Tax exemptions / improvement of the tax system

66%
Energy US$ 334.4 B

Social and Urban US$ 113.1 B

22%

Long -term fiscal measures

* USD Exchange rate as March 18, 2009 of *The original budgetuntil 2010 was US$ 221,9 bi,but was recentlyupdated

PAC investments represent 1.2% of Brazils GDP

* Source:www.brasil.gov.br/pac

36

Brazil Examples
Brazil PAC Projects
Example of Major Projects by Value
Energy Complexo Petroqumico Integrado Refinaria General Abreu e Lima Jirau Hydroelectric plant Angra 3 Nuclear Plant US$ 6.7 B US$ 4 B US$ 3.8 B US$ 4 B US$ 3 B Logistics High speed train Ferrovia Norte Sul / Trecho Sul Ferrovia Oeste / Leste Ferrovia Transnordestina Metro So Paulo / Linha 4 US$ 10.4 B US$ 2.2 B US$ 2.2 B US$ 1.9 B US$ 1.4 B

Santo Antnio Hydroelectric plant

20% 11%

of the original budget has been invested of the projects are concluded

Compliance with the 2010 deadline remains a question mark.

* USD Exchange rate as of March 18, 2009

Source: www.brasil.gov.br/pac Exame Magazine

37

Mexico Infrastructure
National Infrastructure Program
Plan to improve the coverage, quality and competitiveness of Mexicos infrastructure

2007-2012
Total investment

US$ 226 B*

Key Facts Building / modernization

17,598 km of highways 1,418 km of railways Build 3 new airports and expand another 31 Build 5 new ports and expand or modernize 22 more

* Source: www.infraestructura.gob.mx - Base scenario.

38

Mexico Examples
Highways Electricity

Water and Sewer

Airports

* Source: www.infraestructura.gob.mx .

39

Latin America Example

Panama Canal Expansion
Atlantic Atlantic City of City of Coln Coln

MULTIMODAL TRANSPORTATION SYSTEM

PANAMA CITY, Panama March 3, 2009 On track and on time, the Panama Canal Authority (ACP) continues to press ahead with the start of the bid process for the most important project under its Expansion Program - the construction of the new set of locks. Today, the ACP received proposals from three consortia competing to design and build the new, modern and state-of-the-art locks on the Pacific and Atlantic sides of the Panama Canal. The three consortia that submitted bids included: Consorcio C.A.N.A.L; Consortium Bechtel, Taisei, Mitsubishi Corporation and Consorcio Grupo Unidos por el Canal.
* Source: Panama Canal Authority

m Km K 70 70 ox ox pr pr Ap Ap s)) es ille mi 3m 43 ((4

GATU N LAKE

CANAL RAILROAD /FIBER OPTIC TRANSISTHMIAN HIGHWAY PANAMERICAN HIGHWAY CENTENARY HIGHWAY PORTS AIRPORTS

Panama Panama City City

Pacific Pacific

40

Terex and Latin America Infrastructure

41

Other Examples: Middle East

Aviation losses pose no threat to airport expansion
By Nadia Saleem, Staff Reporter, Gulfnews.com (Published: February 19, 2009, 23:10)

Dubai: The Middle East aviation industry will see losses double this year, yet a combined investment of $60 billion (Dh220 billion) in airport development is underway in the region, Africa and the Asian subcontinent. The region is undergoing unprecedented airport expansion to cope with rising passenger traffic, which increased seven per cent last year despite the economic downturn, after 18.1 per cent growth in 2007, according to the Middle East Economic Digest. The Middle East, Africa and South Asia are all continuing significant airport investment. The UAE's heaviest investment is in the new Al Maktoum International at Jebel Ali. Worth $8 billion, it is set to become the largest airport in the world with an annual capacity of 120 million passengers. It is followed by $11.3 billion upgrade of King Abdul Aziz International Airport in Saudi Arabia, as well as other airports in the country. The development of Abu Dhabi International Airport comes next at $6.8 billion followed by Qatars $5.5 billion New Doha Airport
Sources: gulfnews.com, aeconline.com (Abu Dhabi photo), arinc.com (Qatar photo), daylife.com (Dubai photo)

Dubai

Qatar

Abu Dhabi

42

Other Examples: Indonesia

$2 billion coal-fired power plant in Central Java
To fulfill the electrical energy demand on the Java Island PLN plans to build, own and operate PLTU 1 Jawa Tengah 2x(300-400MW) plant to supply electricity for industrial and public use. The plant will consist of two(2) units having gross output of 300-400MW each. The plant will generate using coal which will come from Kalimantan and Sumatra.

$700 million railway connecting Soekarno-Hatta airport to the capital Jakarta

The Japan International Cooperation Agency are set to sign a deal that would set aside $491 million in low-interest loans for the project. The deal represents part of JICAs 120-billion-yen commitment to finance 85 percent of the transportation system, which the municipal government hopes would help solve the capitals traffic problems. Tenders for the project may not begin until the end of 2010, with construction not scheduled to start until early 2011. The system itself is expected to be operational by early 2016.

Central Java

$543 million deal with Korean Consortium will Double Port Size and Create 5-Star Accommodation Complex at Benoa

Jakarta

The development of Benoa would provide a convenient cruise terminal with a location just minutes from Bali's international airport the Island's main tourism areas. Plans for the development of the Benoa port has reportedly commenced with the signing of a cooperation agreement with a consortium of 6 South Korean companies. Under the terms of that agreement the Korean partners will provide US$326 million for the development of port infrastructure and another US$217 million for the construction of 5-star accommodation and a traffic flyover.

Bali

43

Other Examples: Angola

Angola is one of the fastest growing economies in the world due to its rich mineral resources and rising oil production. The governments focus is on national reconstruction: it has identified investment opportunities in the development of hydroelectric power, water distribution, sanitation and transportation which could improve the rural-urban divide in Angola

Due to the extensive warfare, most of Angola's infrastructure has been destroyed. There are 19,156 kilometers (11,903.5 miles) of paved roads and a total of 2,952 kilometers (1,834.4 miles) of rail tracks. Over 60% of them are not in working condition. There are 32 airports with paved runways and 217 with unpaved runways. Angolas government appears committed to addressing this and other infrastructural issues

44

Other Examples: South Africa

The South African Government is committed to make the 2010 FIFA World Cup the best World Cup ever. Beside commitments that where made to FIFA, the government is also using the hosting of the World Cup to contribute to the growth and development of the country. National governments $2,8-billion direct investment in infrastructure in the World Cup is part of a much larger spending program between 2006 and 2010. During that time, government will be investing more than $67 billion in the countrys infrastructure from rail freight services and energy production, to communications, airports and ports of entry. The World Cup is also stimulating development in neighboring countries. For instance, Mozambique will spend $51 million on the rehabilitation of a railway line. Further more they are investing $600million in new hotels, casinos and other leisure facilities.
45

Terex and Rest of World Infrastructure

46

Key Messages
Pace of economic development is directly impacted by the on-going financial crisis but long-term, underlying drivers remain intact Infrastructure investment has been slowed in places but, onbalance, continues despite (if not because of) the economic crisis Infrastructure opportunities are global but, near term, will be strongest in countries who have the fiscal capacity and the policy mindset to fund aggressive stimulus Global infrastructure is an important opportunity for companys like Terex who have a portfolio of capabilities and the ability to execute globally
47