- ACCIONA Infrastructure
- Jesús Alcázar Interview
In a few months’ time, you will have completed 29 years at ACCIONA Infrastructure. Your entire working life has been spent with the company. One third of this has been as Managing Director for Latin America. Has the outlook changed much in the world of infrastructures in Latin America during these nearly nine years? How do you see this change?
29 years... Gosh! And if we include the first year, when I was an intern finishing off my military service, then it’s 30 years! More than half a lifetime… The landscape in the world of infrastructures in the region certainly has changed. For example, over these nine years numerous countries have developed or modernised their laws governing public-private partnerships (PPP). This has meant that infrastructure plans and the investment associated with them are now channelled through these formats, which were less common in the region previously. At the same time, the profile of some clients has also changed, as well as the companies competing in the sector of course.
What type of infrastructures do you think are most needed in the region? And do the people that make the investment decisions share this opinion?
In such a vast region, the response will vary depending on the location since the level of development is very disparate. However, fortunately for ACCIONA, projects related to the water cycle –in all of its stages– will always be necessary. Another area that adds value to people’s lives is improvements in urban mobility. This is increasingly significant due to the global trend towards the growing populations of large cities, which leads to an increase in the demand for services. It’s also worth mentioning the energy infrastructures that ACCIONA works on through ACCIONA Energy, whether development or investment, or through ACCIONA Infrastructure in the case of construction. With regards to the second question, I believe that generally speaking this opinion is reflected in the plans that different governments are putting together, within the scope of the options open to them. We therefore expect to see investment in these sectors.
What are ACCIONA’s strategic advantages in the region? What is the most important aspect that influences public decision-making?
The strategic advantages are derived from the fact that these basic needs –water, infrastructure, services and a supply of clean and renewable energy– are ACCIONA’s core businesses and our main strength. Furthermore, these activities are developed with the intention of contributing to social welfare, sustainable development and generating value for our stakeholders.
We can therefore contribute enormous value to our clients, and the best way to do this is by providing an integral service, from the start of a project to the end, or at any point in between, whether in the design, construction or maintenance. In addition to this, the group has an extensive presence in the region and is also hugely experienced (we have been in Latin America for nearly 50 years uninterrupted!). Consequently, our customer service is well recognised and appreciated.
With regards to the second part of the question… it’s a little bit of everything. Obviously, being able to make proposals at competitive prices is fundamental for clients, and this is based on a good technical study, which we are able to carry out thanks to the specialisation of our teams. But it is also the result of our knowledge of the local market and knowing which companies and specialists will be key elements for ACCIONA when making a proposal. Clearly, ACCIONA’s financial solvency also works strongly in our favour when competing for PPP projects.
In other parts of the world where ACCIONA Infrastructure is present (Australia, Norway…) there is extensive institutional experience with the PPP model. Perhaps this tradition doesn’t exist in Latin America. What is the future of the PPP format in the region?
The future? I would say that the future is already here! Numerous countries in the region now have a suitable legal framework and are recognised by the markets as destinations for investment, which is resulting in increasing numbers of projects. In terms of sectors, I would highlight highways and railways of course, but also one in which ACCIONA has extensive experience – sanitation infrastructure. Similarly, there are increasingly more examples of energy infrastructures, such as transmission lines, and of course PPP in the water sector, both for water treatment and services. All of these are of great interest to us.
What about the specific characteristics of the region. Are there differences between working in Latin America and other parts of the world? And between different parts of the subcontinent?
Every location has its own characteristics and you need to know how to deal with them - and above all, how to adapt to them. Certainly there is a lot of talk about the gap between the so-called Anglo-Saxon model and the Latin one. Fortunately, with its current organisational model, ACCIONA can adapt to any location and carry out its work with confidence. The progress made in recent years has been extremely important and has meant that almost every employee and manager in the countries where we are present is local. This is fundamental. I should emphasise that the Latin American market is extremely important for ACCIONA Infrastructure. As I have already said, we have been established there for many years and it was the first region in our expansion. Moreover, culturally it is very similar and that is highly significant.
Can you tell us about the new organisational structure for the Department – the reasons for the change, the objectives…
At present, we operate in the region through three platform countries – Mexico, Brazil and Chile. Each one provides support to its neighbouring countries. We have now completed the phase in which the main objective was to make our geographic implementation more efficient. Of course, this needs to be constantly reviewed due to changes in the markets, but as of today it is pretty stable. So the next goals are about enhancing the synergies between ACCIONA Infrastructure’s different businesses.
Our local teams try to ensure that all of the know-how accumulated from developing the business can be leveraged, so that new business lines can be launched using this knowledge and experience. This is also very important for potential new clients, since they will deal with a coordinated team that is not a “novice” in the market, even though it might be the first proposal being made for that specific business line. Personally, it is a privilege to be able to work with the team of people that make up the LatAm Department, both in the individual countries and the HQ staff.
What are the most important projects that ACCIONA Infrastructure has underway in Latin America?
At present, we are in the final phase of the Quito Metro and extremely satisfied; we are constructing a windfarm in Tamaulipas, Mexico; two lots of the São Paulo ring-road project in Brazil; mining projects for CODELCO in Chile, and two drinking water treatment plants and a highway in Panama, as well as the construction of an aqueduct and the restoration and improvement of 13 beaches in the Dominican Republic – all significant in terms of their budget.
Do you foresee changes to our main existing clients?
ACCIONA Infrastructure’s clients come from both the public and private sectors. In the case of the former, the usual cyclical changes associated with electoral processes have an impact, but this is an inherent aspect of this business. Nevertheless, in the last few years, public officials have become notably more professional. With regards to private sector clients, we are working to increase the number and diversity of clients, rather than focusing on changes.
What about the future? In your opinion, what are the main challenges facing ACCIONA Infrastructure in Latin America?
We want to expand our activities, strengthening our construction activity, which is extremely well established, but also continuing to help Water, Service and Industrial areas to grow. We are looking for and analysing more and more opportunities in the private sector in general. We are monitoring various projects in the mining sector, which we could participate in through various business lines. The objective of all of this is to expand the group’s presence and to make it more diversified and balanced, both in terms of the type of projects and clients and between the different business lines.