KPMG specialists have analyzed more than 70 regional programs aimed at developing transportation and road infrastructure, and conducted a series of interviews with the main participants on the Russian market. Their conclusions are presented in a new study.
The goal of the study was to analyze the Russian road infrastructure market. The preparation of the report involved interviews with the major players at the federal, regional and local level, consultation with the departments of transportation and roads in the each of the regions, analysis of more than 70 regional programs to develop transportation and road infrastructure in Russia. On the basis of the data collected, we drafted a list of recommendations to improve competitiveness, taking into consideration the experience of the leaders of the Russian road infrastructure market, as well as the experience of major international companies.
The results obtained demonstrate a trend to projects becoming larger and more integrated, a change in the geography of their implementation, and the consolidation of players. The market for road infrastructure is attractive, but its participants will be forced to adapt their business models in response to ongoing market changes. It should be noted that several players have already taken active measures to refine their business models, but under conditions of increasing competition and reduced profit margins they will have to pay particular attention to improving their internal efficiency.
Appeal of the road infrastructure market
Change in operating conditions
The leading companies are encountering significant changes in working conditions on the market, specifically: projects are becoming larger and more complex;
Under the pressure of these changes, players are forced to adapt their business models, diversify their services, move into related segments, and also raise their efficiency and optimize costs.
Measures taken by leading companies to adapt their business models in response to changes in the market
The main measures that may help companies to remain leaders in the midst of changing market conditions are:
In addition, companies must pay particular attention to restraining costs and becoming more efficient.
Main cost-cutting initiatives for companies on the road infrastructure market
KPMG specialists have identified seven initiatives to cut costs for road infrastructure companies, which may allow them to improve their operating efficiency and make them more competitive: