Market Snapshot

The  Lithuania infrastructure sector is varied, comprising road, railroad, port,  airport, telecommunications and electric power generation and transmission  infrastructure. Each of these subsectors enjoys specific driving forces and  advantages, as well as being plagued by specific challenges. A common  denominator is that they all rely heavily on government spending and PPP  projects, which in turn largely hinge on loan or debt-instrument financing.  Infrastructure projects are characterised by long gestation periods and  cumbersome land clearance and other procedures, which often result in project  schedule and cost overruns.

The poor financial health of many infrastructure companies has resulted in  lenders seeking to limit their credit exposure to the infrastructure sector,  which in turn has made many players cash strapped. Thus, the market itself  has encouraged only larger and financially stronger companies to survive,  thereby contributing to sector consolidation. The increasingly affluent and  urban middle class are increasing in Lithuania.

Over the past decade, this has put great strain on existing roads,  railroads, ports and airports in the country, both in terms of passenger and  freight movement. To address this, the government has adopted numerous  programmes, policies and initiatives aimed at bridging Lithuania  infrastructure gap, helping bring the infrastructure in less economically  advanced States up to par with their better-off counterparts.

Market Overview

Lithuania  needs to expand its existing ports and in some cases, even build new ones, as  some have become landlocked in urban areas that were developed after the  ports were built. The expansion of such ports is impossible, necessitating  the building of new ones. As Lithuania welcomes more international passengers  ever and boasts an increasing number of domestic air travellers, it needs  more, larger, and better airports too. Lithuania, therefore, has a  substantial project backlog over the short- to mid-term, which bodes well for  the growth of its infrastructure sector and the economy in general, given  that good infrastructure is essential for successful business activities.  Lithuania transports the majority of its road passengers and cargo on the  national highway network, which represents a minuscule share of all roads in  the country. There is therefore substantial demand for new roads, as well as  for re-surfacing existing roads.

The government has adopted measures to attract more FDI into the country in  order to boost tourism, both in terms of domestic travellers and large-scale  international MICE events. This has also created a higher demand for airports  and airport infrastructure. The needs of Lithuania’s foreign trade have put a  strain on existing ports in the country, necessitating the construction of  new ones. That many infrastructure projects are PPPs means that smaller  companies often work side by side with larger ones, which helps them increase  their level of specialisation. On the other hand, small-sized companies are  not equipped to handle large-scale projects, which means that the sheer size  of Lithuania typical infrastructure project (alongside other factors such as  access to financing) are conducive to sector consolidation.

The government’s focus on developing infrastructure as a backbone sector  for economic growth means that administrative, sector-specific challenges are  being addressed, which is expected to create a more efficient business  environment conducive to the growth of the infrastructure sector as well.  Restraining forces for the infrastructure sector tend to be segment-specific.  For example, Lithuania’s power generation is dominated by coal, and supplies  of domestic coal are frequently problematic. Natural gas power generation is  dependent on natural gas imports, and port and airport expansions hinge on  timely land clearances.

Road building and construction in general, on the other hand, frequently  affect wildlife areas and involve the displacement of indigenous peoples,  which increases the administrative approvals that projects need to obtain  before they can begin. Unexplained delays in administrative approvals and  clearances often result in project delays, as do lengthy court dispute  settlements between companies.

In Lithuania, government agencies tend to function independently and are  not required to coordinate with project authorities to facilitate approval  procedures. Growing competition in all infrastructure segments and  competitive bidding for government projects is affecting the profit margins  of companies. In construction, inputs account for nearly half of construction  costs, and the prices of construction raw materials are volatile. This  exposes companies to substantial commodities and FX market risks too.

The increasingly affluent and urban middle class are increasing in the  Lithuania. Over the past decade, this has put great strain on existing roads,  railroads, ports and airports in the country, both in terms of passenger and  freight movement. To address this, the government has adopted numerous  programmes, policies and initiatives aimed at bridging Lithuania  infrastructure gap, helping bring the infrastructure in less economically-advanced  States up to par with their better-off counterparts

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Table of Contents

1. Research Methodology and Scope

2. Market Overview

3. SWOT Analysis of Infrastructure Market

        3.1 Strengths

        3.2 Weakness

        3.3 Opportunities

        3.4 Threats

4. Infrastructure Market

        4.1 Construction and Infrastructure Forecast

        4.2 Transportation Infrastructure

        4.3 Energy and Utilities Infrastructure

        4.4 Residential Infrastructure

        4.5 Non-Residential Infrastructure

5. Major Infrastructure Projects (2020-2024)

6. Regional Infrastructure Market

7. Global Infrastructure Market Analysis

8. Appendix

Major Players

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