Competition in Large Projects
PPPs vs Traditional Procurement
Paris, 22 June 2018
Athena Roumboutsos
University of the Aegean, Dpt. Shipping, Trade & Transport2Competition for the Project3

Marketsize/
trends(Contr)
ActorsTendering
ProcessProjectSize(value)
InstitutionalMaturity

NationalPolicies/
Strategies

4What we did

5

Data

CANs = Contract Award Notices

Actor Groups

Public Works
Financing

EIB dbTransport
PPPs

BENEFIT
project data6

Tenders for Road & Rail Works (CANs 2006-2016)
500
450

Markets in Transition

400
350
300
250
200
150

100
5002006

20072008

2009

2010
RailRail2011
Roads2012
Roads2013201420152016

7

What we foundTendering Process
RAIL(>200m EUR)

8Road(>200m EUR)

Road PPPs

2006-92011-16(BENEFIT DB)

OpenRestricted

NegotiatedCompetitive Dialogue9(Cont)Actors: Adjusted Concentration Ratio
40%

A 2-tier Market
20Actors

30%

>2000
Actors

20%

10%

0%
ACR4

ACR(8-4)

ACR Rail 2006-2009

ACR(12-8)

ACR(16-12)

ACR Rail 2011-2016

ACR(20-16)

ACR(24-20)

ACR Road 2006-2009

ACR(28-24)

ACR(32-28)

ACR Road 2011-2016

ACR(36-32)

ACR(40-36)

ACR PPPs 2016

ACR4 Award Allocation
Road Works
2011-20162006-2009

Top Country Activity

ACR4HomeACR4Present

ACR4 Award Allocation
Rail Works
2011-20162006-2009

Top Country Activity

ACR4HomeACR4
Present

100%

Home Awards: Road Works

95-99%
85-95%
75-85%

2006-2009<75%

2011-2016

Cross Border Awards

Top Country Activity

2006-20092%

2011-2016

3%

All Construction

1%

>99%

Home Awards: Rail Works

95-99%
85-95%
75-85%<75%

2011-20162006-2009

Cross Border Awards

Top Country Activity

2006-2009

18,4%

2011-2016

19,5%

All Construction

1%

14

Mean Number of bids per Call &Single Bid Awards
1235%

1030%
25%

820%

615%

410%

25%

00%
Road (2006-2009)

Road (2011-16)

MeanRail (2006-9)% Single Bid Awards

Rail (2011-16)

15

Marketsize/Size/
Trendstrends

Project
Size(value)
Institutional
Maturity

% of
Large
Projects(Contr)
ActorsTendering
Process

Concentration of
Large
Actors% TL
Construction
MarketNational
Policies/
Strategies
Strategies

16

ExampleMarketsize/
Size/
Trendstrends

ProjectSize(value)
Institutional
MaturityHigh
Average
Low

% of
Large
Projects(Contr)
ActorsTendering
Process

Concentration of
Large
Actors% TL
Construction
MarketNational
Policies/
Policies/
Strategies

17

Mean Number of bids per Call &Single Bid Awards
1235%

1030%
25%

820%

615%410%

25%00%Road (2006-2009)

Road (2011-16)

MeanRail (2006-9)% Single Bid Awards

Rail (2011-16)

18

Some conclusions• PPPs & Large Infa project not much different: sameactors, same processes, same market structure• Top actors active across sectors and countries• Greater cross-border activity than for construction ingeneral• Project size influence on competition subject to national
and wider market structure
Generally, low level of competition identified ▶︎ Cost of Risk not minimized

Qs• Why has there not been much policy discussion aroundcompetition and PPPs or major infrastructure
procurement in general?
• The market concentration for PPPs and traditional
procurement is high - a natural state of the market or afailure?
• Has the recent crisis reshuffled the market in any
significant way?

Recommendations• Large PPP and traditionally procured projects should be addressedin the same way• Complex procurement procedures secure minimum competition• Keep an eye on how competition in the market evolves.
• Plan procurement centrally• Think of the future• Provision of Accurate Data by Contracting Authorities