Colombia - Country Commercial Guide
Infrastructure

This is the best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-11-08

Overview

In the 2019 ranking of the World Economic Forum Global Competitiveness Index (GCI), Colombia ranked 57 out of 140 economies.  Colombia climbed from a ranking of 66 in 2017. Colombia’s advancement in ranking reflects recent improvements in infrastructure, stability, and institutional development. However, Colombia’s infrastructure is still underdeveloped compared to regional counterparts like Chile that is leading the Latin America and Caribbean region. In 2018, the Infrastructure GCI for Chile was 41, while Colombia’s was 83. The following year, Colombia increased its Infrastructure GCI by two points, demonstrating that while progress in this sector is slow, it is steady.

Colombia and Chile’s Global Competitiveness Index for Infrastructure

Infrastructure Index Component

Colombia

Chile

Rank

Score

Rank

Score

Road Connectivity

97

65.4

9

96

Quality of Road Infrastructure

104

39.7

25

70

Railroad Density km/1,000km

89

4.8

59

19

Efficiency of Train Services

99

12.2

61

36

Airport Connectivity

31

68.7

51

58

Efficiency of Air Transport Services

78

57.6

54

66

Liner Shipping Connectivity

33

50.1

40

43

Efficiency of seaport services

72

51.5

31

66

Source: World Economic Forum Report for Colombia 2018-2019.
Score 0-100 best
Rank 141-1 best

Colombia’s most recent National Competitiveness Report published in 2020 highlights Colombia’s regional and national infrastructure challenges:

• Colombia ranks 104 out of 141 countries in terms of quality of land transport infrastructure.

• In terms of digital innovation related to the infrastructure sector, 64 percent of companies in Colombia do not use any technological tool in their logistics processes.

• While the Colombian Government has invested heavily in internet connectivity since 2019, a significant digital divide persists. 

• Colombia scores 2.94 out of five on the Logistics Performance Index, lower than the OECD average (3.64) and countries in the region such as Chile (3.32), Mexico (3.05), and Brazil (2.99).

• The increase in e-commerce due to COVID-19 has challenged logistics capacity. Many companies do not use digital tools in their logistics processes.

• Intermodal transport is a significant challenge: more than 80 percent of freight is moved by road in Colombia.

After the signing of the Peace Agreement between the Colombian Government and the Revolutionary Armed Forces of Colombia (FARC) in 2016, infrastructure development became a priority for former president Juan Manuel Santos.  In 2015, as the Agreement with the FARC was being negotiated, the Santos administration established an infrastructure initiative to connect Colombia through multimodal transportation projects, commonly referred to as the Intermodal Transportation Master Plan (PMTI). This initiative encompasses 101 road projects, 52 highway projects, 5 railway projects, 8 fluvial projects, and 31 airport projects, and various dredging projects. In 2016, PMTI’s value was COP 10.2 trillion (USD 2.7 billion) equivalent to 1.3 percent of Colombia’s GDP.

Colombia’s 2021 transportation budget was COP 12 trillion (USD 3.1 billion).  According to Colombia’s Infrastructure Chamber of Commerce, this budget may increase to COP 15 trillion (USD 3.9 billion). New highway and bridge projects are a priority of the Colombian Government’s infrastructure investment and designed to promote Colombia’s exports by lowering the high logistics costs which hamper the country’s productivity and drive up the cost of consumer goods and industrial inputs. PMTI includes the construction of 4,970 miles of undivided highway, 851,278 miles of two-lane highway, 160 tunnels, and 1,300 viaducts. New highway construction is being developed under a public-private partnership (PPP) scheme (concession projects). As of August 2021, two out of twenty-nine of the PMTI highway projects have been fully completed. By the end of 2021, it is anticipated that a total of six projects will be completed.

One of the priorities of the Duque administration is to deliver 19 concession projects under his administration, which ends in August of 2022. According to the Colombian Transportation Ministry, these highway projects are valued at COP 47 billion (USD 12 million), from those, COP 27 billion (USD 7 million) have been completed. In addition to the highway projects, the Duque administration also announced a series of 24 multimodal transportation projects to connect Colombia’s distribution centers with seaports.

Generally, U.S. companies have not participated in Colombia’s highway development due to the uncertainty surrounding cost recovery, the high risk associated with the projects (many in remote areas), and the complexities of environmental licensing that require consulting with local communities. Many U.S. companies have found the return on investment to be too low given the risks, preferring to participate in less risky portions of projects, such as engineering, architectural design, and financing. As a result, international firms from Spain, France, Italy, Portugal, Brazil, and Mexico are leading development of Colombia’s highway projects. Recently, China has begun bidding on highway projects. Colombian firms also participate in bids under a consortium with international firms.

Railways

In November 2020, the Duque administration launched the Railway Master Plan which aims to develop the existing cargo and passenger railways, built in the nineteenth and twenty centuries. Its goal is a 26 percent reduction by 2030, of relatively high logistics costs, that hamper the country’s productivity and cause environmental pollution. The greater Bogota and Medellin areas plan to have railway developments in the coming years. Bogota aims to foster the Cundinamarca region by connecting the city and rural surrounding areas with metro lines and commuter trains. Similarly, Medellin is looking to increase the Antioquia Department’s competitiveness by connecting the city’s distribution centers to seaports.

Airports 

In Colombia, airports are operated via concession agreements. The Duque administration announced airport renovations for Cali, Neiva, and Choco, estimated at COP 1.42 trillion (USD 368 billion), Cartagena estimated at COP 2.83 trillion (USD 734 billion), and San Andres estimated at COP 300 billion (USD 78 million).

Seaports

Colombia’s National Infrastructure Agency (ANI) grants concessions for seaports for 20 to 25 years to private companies. Currently, Colombia has eight port areas located in the Pacific and Caribbean regions. ANI has provided concessions to 61 ports. Colombia’s principal seaports in Buenaventura and Barranquilla are losing competitiveness because sediment is impacting port access. Dredging projects have been proposed for Colombia’s principal waterway, the Magdalena River and the Dique Canal which connects it to the Cartagena Bay.  

Residential Buildings

The residential construction subsector leads the construction sector in Colombia. Thirty-eight different construction companies, commonly referred to as “Constructoras”, dominate the residential housing sector. Since 2013, this subsector has grown from 112,000 housing units sold to 176,000 housing units in 2020. According to the Minister of Housing and Cities of Colombia, Jonathan Malagón, by the end of 2021, the residential construction sector will close the year having sold 209,000 units. The growing demand is due to the National Government’s subsidies for the construction of low-income houses and low mortgage rates.  The principal regions that saw growth in residential housing demand in 2020 were Bogota and Cundinamarca with 30,830 house units, Antioquia with 8,761 units, and Atlántico with 6,727 units.

Leading Sub-Sectors:

  • Complex engineering projects and services related to mass transportation systems: seaports, dredging, tunnels, and bridges
  • Specialized construction equipment
  • Intelligent transportation systems equipment and services
  • Road safety equipment and services (such as electronic toll collection)
  • Architectural and engineering for healthy, highly efficient, and cost-saving green buildings under the LEED framework

Opportunities

The U.S.- Colombia Trade Promotion Agreement (TPA) enables road and construction equipment to enter Colombia duty free. Services such as project management, bridge design, architecture, and engineering, among others, also enter Colombia duty free. Other advantages from the TPA include stronger legal protections for U.S. companies, expanded access to the services market, market access for used goods, increased transparency in procurement, and improved dispute settlement mechanisms. Under the National Treatment Caveat, Chapter Nine of the TPA, U.S. companies must be treated as locals when they participate in public bids, eliminating the disadvantage they used to face before the TPA. The one exception is public bids issued by the Colombian Civil Aviation Authority (AeroCivil). Since opportunities in road construction, airport expansion, and port expansion are offered through concessions and contracts governed by Colombia’s PPP legal framework, U.S. firms interested in offering services to construction companies in Colombia should understand how the PPP structure works. U.S. firms are advised to find a local representative who can support them in-country or explore the possibility of a joint venture for infrastructure projects.
 

Trade Events
National Infrastructure Congress

Colombian Chamber of Infrastructure - CCI

Virtual due to COVID-19 restrictions

AAPA Latino
XXIX Latin American Congress of Ports
Cartagena, Colombia 
 

XVI Expo construction – Expo design 2021

Cundinamarca and Bogota Construction Chamber- CAMACOL

Bogota, Colombia        

Key Contacts

  • Colombia’s National Infrastructure Agency  
  • Colombian Chamber of Infrastructure
  • Colombian Society of Engineers
  • Camacol-Colombian Construction Chamber
  • Camacol Antioquia’s – Regional Construction Chamber
  • SECOP

For additional information, including market analysis, trade events, and the products and services that the U.S. Commercial Service can provide to help you succeed in the Colombian market, please contact:

 

U.S. Embassy Bogota

Stephanie Delgado Vera

Construction and Infrastructure Commercial Assistant

Stephanie.Delgado@trade.gov

+57 (601) 636-6772

https://www.trade.gov/colombia