Boston, MA -- (SBWIRE) -- 07/16/2012 -- BMI View: As foreign private investors become increasingly wary of Argentina, in the wake of the governments announced plans to nationalise Spanish oil major Repsol's holdings, the outlook is weak for new developments. China remains a dominant force in Argentina's construction industry, thanks to a US$10bn credit agreement extended by the country. Industry value is forecast to reach US$27.7bn in 2012, with year-on-year (y-o-y) growth of 3.3%. The sector is then expected to grow to US$49.3bn by 2016.
Key developments include:
- The Inter-American Development Bank (IADB) announced that it will provide a US$300mn loan to finance the expansion and refurbishment of roads in the Norte Grande region of Argentina. The investment is intended to enhance the accessibility, efficiency and safety of the region's major road network, as well as improving the quality of its provincial thoroughfares. The provinces to be affected include Catamarca, Chaco, Corrientes, Formosa, Jujuy, Misiones, Salta, Santiago del Estero and Tucuman. Notre Grande has a population of approximately 8.3mn people - 21% of the country's overall population.
- UK dredging contractor Royal Boskalis Westminster was awarded a share of a EUR90mn (US$121mn) contract for capital and maintenance dredging in the port of Bahia Blanca, Argentina, reports Sand and Gravel. Royal Boskalis's share of the contract is worth approximately EUR55mn (US$73.8mn). The dredging will begin in 2012 and 5.5mn cubic metres of firm soil will be removed. The five-year maintenance contract will involve the annual removal of approximately 3.8mn cubic metres of silt.
- The Argentine and Chilean governments discussed joint infrastructure projects at the presidential summit in Santiago on March 15 2012. Trade between the two countries has declined dramatically since 2002, although Argentine exports to Chile still amounted to US$4.75bn in 2011. Chile is no longer dependent upon Argentina for its gas imports, and the trade relationship between the two countries has been further stymied by Argentine protectionism.
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We believe President Fernandez will continue to make strong economic growth and import substitution policies a landmark of her second term in office. At a time of intensifying challenges for the high growth, high-spending economic model she has forged, interventionist economic policies and the appeal to Argentine's nationalist sentiment over the Falklands Islands dispute will help her maintain strong popular support in 2012.
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