By Oliver Clark.
China has been ranked as the most attractive country in the world for investors wishing to finance aviation related projects thanks to its booming airport construction programme, but other BRIC countries continue to present too high a risk, a new report has revealed.
The communist country's plans to build 97 new airports by 2020 at an estimated cost of $62.5 billion, makes it "the most attractive place to invest" in the world, but a lack of clarity on a fiscal, political and operational level are combining to deter similar investment in Russia and India, consultant's EC Harris' Investment in Transport Infrastructure study states.
In fact, North America and Europe continue to outperform their rivals, with Spain and Portugal's plans to sell their airports to tackle high national debt, putting them at number two on the list.
Poland's plans to improve infrastructure ahead of the 2012 European Football Championships means it also ranks high.
Romania, Argentina and Venezuela scored badly and were branded "high risk markets" in which to invest in transport projects. Romania is currently under investigation by the European Commission over state aid provided by several of its regional airports to a low cost carrier.
The research ranked 17 major countries and regions across the globe according to the relative attractiveness of their transportation sector to a broad range of potential investor groups, key criteria including airport and rail construction projects, GDP growth and saturation of PPP programmes.
"The research underlines that ambition alone will not be enough if emerging nations are to deliver the purpose-built transport infrastructure that they need to support their continued economic growth," said Mark Prior, EC Harris' Head of Transportation.
"Whilst some investors may be prepared to take on a higher level of risk, they will still want to receive greater assurance from non-OECD countries particularly around their approach to mechanisms like PPP funding (public private partnership) as a way to help mitigate some of the risk they face."
