Even the most optimistic engineer would look upon Colombia as a challenge when it comes to infrastructure. Almost twice the size of Texas, the country is split by three strands of the mighty Andes mountain range, descending in the east into Amazonian jungle, to the west into forests of the Pacific shore and to the north into coastal lowlands.

Any road, railway or pipeline might have to cut through solid rock at high altitude and cross deep crevasses and dense jungle. “It’s a very complex geography; it’s as broken a country as they come,” says Esteban Piedrahita, director of Colombia’s national planning department (DNP). “And the way the country was populated was not necessarily thinking about exports and imports – we have 60-70 per cent of our population concentrated, and production and consumption situated very far away from the coast.”

For decades, this disconnect has been exacerbated by underinvestment and the activities of the violent Revolutionary Armed Forces of Colombia (Farc) and a host of criminal and paramilitary narco-traffickers that has at times rendered entire regions no-go zones.

Until five years ago, only 15 per cent of Colombia’s roads were paved, most of them single lane. In a country where some 70 per cent of cargo is hauled by truck, that made high transport costs a regular burden.

“It costs me as much to ship goods from China to Colombia’s main Pacific port, as it does from the Pacific coast up to Bogotá,” says one businessman.

Mr Piedrahita says all that is about to change. His finger traces over the inland cities of Bogotá, Medellín and Cali and a web of multi-lane highway systems that will link them with each other, and with the Caribbean coastal ports of Barranquilla, Cartagena and Santa Marta.

“The public works programme that is under way for the next half decade is historically significant; it will transform Colombia,” he says.

The global financial crisis has flagged up the sale this year of a further 10 per cent of shares in Ecopetrol, the partially privatised state oil company, to fund an ambitious infrastructure programme.

Mateo Restrepo, who assumed the newly created cabinet post of high commissioner for anti-cyclical policy in April 2009, was given a budget of $27.5bn (£18.3bn), or 11 per cent of GDP, for infrastructure works, with a focus on housing, transportation and water works. “If you take those three sectors, you have 40 per cent of the investment, but in terms of employment you have 86 per cent of the impact,” Mr Restrepo says.

Construction activity grew at double-digit rates in the second and third quarters of 2009 (17 per cent and 13.7 per cent respectively, compared with -0.9 per cent and 13.5 per cent in 2008). The growth was powered by government spending on civil works, as private construction work slowed sharply.

Civil works grew at 41 per cent in the third quarter of 2009, while private construction fell 18.6 per cent.

Luis Villegas, president of the National Association of Colombian Business (Andi), acknowledges the recent acceleration in infrastructure works, saying “for the first time in eight years, infrastructure has started to show up in the national accounts”.

But, he says, the government’s concessioning process lacks transparency and puts too much risk on investors. Infrastructure, he says, should be the next government’s third-highest priority after fiscal and labour reform.

Mr Piedrahita says he would also like to see a strengthening of the concessioning system, with a separate regulatory authority, perhaps modelled on the successful national hydrocarbons agency.

He agrees that Colombia has traditionally lagged behind its neighbours in infrastructure investment, but points out it has attracted significant recent investments.

Among the biggest hydro schemes in development are the 844MW Porce III project by EPM, the Colombian power company, and a $2.8bn, 2.4GW Hidroituango project to be auctioned in June.

The seven approved bidders for the Hidroituango dam, which should begin construction in late 2011, include EPM, Three Gorges Corporation of China and Camargo Corrêa, Eletrobras, Andrade Gutierrez and Odebrecht of Brazil.

Yezid Arocha, of Odebrecht, the Brazilian construction giant, says Hidroituango fits the bill for his company. It has already secured the concession for stage II of the $2.6bn, 1,000km Ruta del Sol highway, which will will link Bogotá with the Caribbean port of Santa Marta.

Upcoming big transport projects include sections I and II of the $1.2bn Transversal de las Américas, which will link Colombia’s Caribbean coast with Venezuela and Panama; the Autopistas de la Montaña, which will connect the centre of the country with the Caribbean coast; the $650m construction of a new international airport in Bogotá; the 2010 construction of airports in Caldas, Santa Ana-Cartago and Lopez de Micay; and the concessioning of airports in the coffee-growing centres of Armenia, Pereira and Cartago and the north-east zone.

The level of expertise and technical assistance associated with these projects is already attracting strong interest from foreign investors and pension funds, Mr Piedrahita says.

Among those is Acciona, the Spanish renewable energy company, which has designated Colombia one of 11 countries it considers strategic.

More than 15 private equity funds have also closed since 2005, including specialist infrastructure funds such as Brookfield of Canada, which launched a $320m fund in late 2009.

“This is new. We haven’t really had private equity funds here ever; I think this is a very positive development,” he says.

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