OHL Group Annual Report - Grupo Villar Mir

2010 OHL Group Annual Report
The Spanish State General Administration tendered a mere 5,531.5 million euros, as
opposed to 12,220.4 million euros during the previous year. This sharp fall of 54.7% can
be explained by the pressure of the public debt on the execution of the annual budget
for 2010 and subsequent years, and that has prompted that the Ministry of Public
Work has just tendered 3,662.1 million euros, resulting in a 60.2% cutback in tenders
with respect to those carried out in 2009, which amounted to 9,209.9 million euros.
The most significant decrease within the sphere of the Ministry of Public Works took
place in Adif, the Spanish Railways Infrastructure Administrator, with the amount
tendered falling from 5,253.3 million euros in 2009 to 1,604.1 million euros in 2010,
that is, 69.5% fewer tenders.
The Spanish Directorate General of Highways, on its part, reduced tenders by 35.9%,
from 728.3 million euros in 2009 to 467.1 million euros, and the Directorate General
of Railway Infrastructures tendered 349.9 million euros in 2010 as opposed to 862.8
in 2009, a 59.4% decrease.
In the meantime, Aena (Spanish Airports and Air Navigation) as well as the Spanish
port authorities closed 2010 with significant decreases in their volume of tenders.
Along the same line of cutbacks, in 2010 the Spanish Ministry of Environment, Rural
and Marine Affairs tendered 21.5% less than the previous year, with 1,142.2 million
euros tendered in 2010, as opposed to 1,455.9 million euros in 2009.
In the face of this situation, which had been foreseen, OHL made the required
adjustments in the Domestic Construction division cost structures in order to keep
this division profitable, despite its decreased volume of activity.
Domestic Civil Engineering Works
Market and Strategy
The civil engineering works sector was the sector recording the greatest decrease in
Spanish public tenders in 2010, with the amount tendered dropping to 15,512.4 million
euros, a 38.6% decrease with respect to the 25,271.3 million euros tendered in 2009.
All of the subsectors, with the exception of environmental civil engineering works,
recorded decreases, as can be seen in the table below.
Construction work on the
Bus-HOV lane on the C-58,
Barcelona.
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