UK construction blog
Home > Industry News > Reasons Why Managed Travel is a Must for Construction

Reasons Why Managed Travel is a Must for Construction

March 18th, 2020

During the trip that we will make through the following paragraphs we will visit the destinations chosen by construction companies for managed travel, the origin and the reasons that drove their internationalization, the difficulties and the results obtained. These companies manage projects in a comprehensive way -including design, execution, financing, operation and maintenance-, in over 80 countries, allowing them to successfully solve the challenges posed by extra-budgetary infrastructure financing systems. Challenges from the right pick of car hire to strategies and luggage requirements.

Additionally, they have demonstrated ease in managing and adapting to local production factors, establishing alliances and agreements with partners from different countries, and dragging a wide base of competitive subcontractors and suppliers.

Finally, these are highly diversified groups towards other sectors such as environmental services, comprehensive building management, the airport sector, the integral water cycle or renewable energy, reaching high figures in their portfolio of businesses that in many cases exceed construction activity. This feature allows them to more efficiently manage the entire life cycle of the infrastructure, generating the necessary confidence in financial investors and public authorities to raise funds from capital markets and finance projects.

As a result of technical development, internationalization, diversification and business concentration, the associated companies have established themselves as world leaders in infrastructure, both in the field of construction of all types of projects and in the management of transport infrastructure.

In general terms, we can indicate that the main motivations of companies to boost their construction activity in the international arena are the maintenance of turnover and productive capacity, participation in major projects in which they contribute their extensive experience and knowledge or the geographical diversification of their activity to minimize risks.

On the other hand, the foreign presence has evolved according to the different approaches to the different countries, responding to the strategies of the companies themselves or according to the requirements set by local markets. In this sense, the entrances to the countries where they operate today have been able to start in very different ways, which could be through a specific tender, a subcontracting contract, a joint venture agreement for a specific project, the creation of a branch or a subsidiary, the formation of an international consortium, or the acquisition or merger with a local company. Recently we are witnessing movements within the latter form of exit, which intensify the creation of large international groups made up of companies of multiple nationalities and with very diverse activities not necessarily related to construction.

Likewise, the infrastructure companies to which we have been referring have acquired significant experience in toll motorway concessions and business travel, and subsequently expanded their concession activity to other types of infrastructure and services. As is well known, knowledge in infrastructure management also moved abroad. The geographical distribution of international activity has evolved with the experience of companies, with the development of countries and with the interests of both. In general terms, we can point out as main current destinations to countries that offer certainty, that guarantee physical security of displaced persons and legal certainty for companies, which have medium and long-term development plans, and offer credit capacity with a developed financial market. These requirements are even more demanding in the case of concession projects, since the very long term of them requires it. Therefore, without being a generalization, it is observed how the activity is greater in North America (30%), Europe (20%), South and Central America (13%), and a growing interest in Oceania. However, the first destinations of these companies were Latin American countries, North Africa and some European neighbors.

Undoubtedly, we can question the advisability of continuing to speak of the internationalization of these companies or the sector, since, as we have seen, they have been internationalized for several decades, and even more so when the environment in which we operate is increasingly globalized. However, it is a process in evolution and constant revision for which there are still many destinations to discover.

We can end this enriching journey through internationalization with the feeling of having carried light luggage, on a simple path, of having found facilities at each stop and even of returning home without any scratches on the heels. However, the trip that we have counted for several paragraphs has no return ticket, it is a walk into the future in which our ‘house’ will get bigger and bigger and the distances will get shorter.

Undoubtedly, companies will continue to encounter challenges, those that come with their own projects and those that will bring destinations with their different languages, laws, cultures, tax systems, currencies, local business fabric etc. New frontiers to explore in an increasingly competitive world will also have to be added, with relevant demographic changes, with new technologies at hand, setting Sustainable Development Goals, bridging the differences for project financing in those countries where there is more need of infrastructures and finding new formulas to continue in excellence.

Link To This Page
1. Click inside the codebox
2. Right-Click then Copy
3. Paste the HTML code into your webpage
codebox
powered by Linkubaitor
Tags:
Comments are closed.