ROAD INFRASTRUCTURE: THE NEW COMMUTER BELTS
The Bitumen Exchange is compiling the results of our annual survey to be released in Cape Town at the Africa Road Congress in November. The initial findings show that road infrastructure continues to see strong investment and buoyant growth rates. This continues to be driven by urban sprawl and rise of subsequent commuter belts in emerging markets. Light rail leads the way in investment terms, as mass transit systems in Asia and Africa are being rolled at a scale never seen before. However, road investment continues to see a surge of funds directed towards it.
In Africa investment is being directed less at national highways, but with increasing regularity at city and regional networks. This reflects the need of a new middle-class to live in suburbs, putting strain on already limited resources. We note that car sales have increased year-on-year in 42 Africa countries in 2016 vs. 2015. The survey notes that African governments are increasing their efforts to ease congestion with overall investment increasing 11% since our 2016 survey. Increasingly there seems to be a positive move towards deploying funds for maintenance - a 6-point shift away from Greenfield project investment year-on-year, again the survey expects Africa to outperform - especially in terms of project value - as ambitious plans to expand road networks and improve internal and regional connectivity are aimed at supporting economic growth. The survey shows that all over Africa we are seeing the significant growth of commuter belts, in particular in Kenya, Nigeria and increased pressure in South Africa. This combined with a rising middle class is seeing more journeys made, and is forcing governments to build more roads. However, funding is still listed as the number one challenge to overcome this problem.
As we discovered at our Africa Road Conference in Kenya this year, African governments are attempting to utilise the public-private partnership (PPP) model to channel private investment into much needed road projects in and around cities. However, many governments in the region are experiencing financial constraints, that has seen the derailment of planned road projects. To overcome this governments are looking at increasing institutional capacity. One of the ways this has been best accomplished is via infrastructure agencies.
The Bitumen Exchange has commissioned a new piece of work to look at how the proliferation of commuter belts in emerging markets is attracting closer attention. We look forward to hearing your views and comments.
Please email the team or DM us on Twitter. All comments welcomed and we look forward to hearing from you.
The Bitumen Exchange Team