Building and Urban Affairs has calculated that the current projects offer efficiency gains of between 5.9 and 28 percent.

In 2009, PPP contract awards in the UK are forecast to total just over EUR 5 billion. Although the financial crisis could hamper the availability of long-term project finance, other European countries are increasingly recognizing the advantages of PPP projects. In Greece, the government is planning to put out to tender contracts worth billions.

HOCHTIEF PPP Solutions is currently active in Germany, the UK, Ireland, Greece, Austria and the USA.

PPP is gaining in significance in the USA, where HOCHTIEF has had a presence through a subsidiary of HOCHTIEF PPP Solutions since early 2008. This young US market is expected to see high rates of growth: HOCHTIEF estimates that the US PPP market could be worth USD 300 billion over the next ten years. In addition, the government is likely to increase investment in infrastructure.

In Canada too, the PPP market continues to grow. Various toll road projects worth more than EUR 2.5 billion are currently at the preparation stage. Added to this are further school and hospital projects. With its focus on civil engineering, our subsidiary Flatiron is already operating successfully in this region.

The growth outlook is also bright in Australia, a mature PPP market. Operating as a PPP project developer here for many years, our subsidiary Leighton has secured a leading position.

Airports

Global passenger numbers were down by just 0.6 percent and therefore almost unchanged in 2008 thanks to a strong first half of the year. At airports in Germany, passenger numbers increased by 1.1 percent in the year under review. HOCHTIEF airports outperformed the average: Here, passenger numbers rose by a total of 1.5 percent to 90 million.

Due to the effects of the financial crisis, the Airports Council International (ACI) is expecting passenger numbers to fall by up to four percent in 2009. Over the long term, however, the ACI industry experts are forecasting average annual growth of more than four percent.

The airport privatization market will also remain dynamic. For HOCHTIEF, this trend offers long-term growth opportunities, as our international presence and expertise mean we are superbly positioned for future privatizations in Eastern Europe, Asia, South America and the USA.

Both lines of business – PPP and airports – require structured, long-term financing, which in turn calls for properly functioning financial markets. It is currently difficult to predict when such conditions will return.

Contract mining

Despite the difficult economic trend, global demand for commodities was high in 2008. This also benefited contract miners, for example, by generating new orders in areas such as Australia and Asia. Over the coming years, much will depend on economic growth in China. This is a key factor driving demand for ore and coal as mined by Leighton, which in turn matters to us. However, experts are currently anticipating continued, albeit temporarily slower growth.

The recent drop in the price of various commodities is not impacting directly on providers of contract mining services, as the mine owners bear the price risk and contracts run for long periods. Over the medium term, a deterioration in revenues could have a dampening effect. Currently, the market remains at a gratifyingly high level. Our Australian subsidiary Leighton, the world's largest contract miner, has been operating successfully in this segment for many years.