BMI View: Estonia retains its first place ranking in our Central and Eastern Europe Project Risk Index, driven largely by its outperformance in the financing and operation components of index. Within the broader region, the relatively high scores of Central European EU members are supported by generous EU funding policies and more sophisticated financial markets, while scores in Eastern Europe and Central Asia are curbed by cumbersome bureaucracy, unfavourable regulatory regimes, and a dearth of financing options. ...BMI View: Estonia retains its first place ranking in our Central and Eastern Europe Project Risk Index, driven largely by its outperformance in the financing and operation components of index. Within the broader region, the relatively high scores of Central European EU members are supported by generous EU funding policies and more sophisticated financial markets, while scores in Eastern Europe and Central Asia are curbed by cumbersome bureaucracy, unfavourable regulatory regimes, and a dearth of financing options. Within the Central and Eastern Europe Project Risk Index (PRI), Central European and Baltic markets generally perform more strongly than their Eastern European and Central Asian counterparts. EU membership is as a key factor behind the scores of those markets which outperform, while markets suffering from endemic corruption and geopolitical conflict are the highest risk markets in which to develop infrastructure. Estonia is as the outperformer by a wide margin, ranking --th globally, while Central Asian countries such as Turkmenistan, which comes in last place, languish behind even war-torn Ukraine.
...The construction risk pillar of the PRI quantifies the ease of doing business in markets, along with other industry metrics such as strength of arbitration, ease of acquiring permits and building materials cost. The Baltic countries, in addition to Hungary, lead the pack with regard to construction risk scores, on the back of their excellent performance in enforcing contracts, public-private partnerships (PPPs) or otherwise, and their ability to realise infrastructure projects in a timely manner. ...The construction risk pillar of the PRI quantifies the ease of doing business in markets, along with other industry metrics such as strength of arbitration, ease of acquiring permits and building materials cost. The Baltic countries, in addition to Hungary, lead the pack with regard to construction risk scores, on the back of their excellent performance in enforcing contracts, public-private partnerships (PPPs) or otherwise, and their ability to realise infrastructure projects in a timely manner. As with the financing pillar, the scores broadly break down along EU and non-EU lines. The emphasis on rule of law in large part explains why all EU members except Romania outperform the regional average, while the lack of institutional strength in non-EU countries apart from Kazakhstan ensures they score below it. In particular, high levels of corruption in Central Asian countries such as Uzbekistan and Turkmenistan impede a contractor s ability to shepherd a project through the construction cycle, as they are exposed to myriad potential risks ranging from artificially inflated labour costs to bribery and extortion.
...The financing component of the PRI score measures the sophistication, availability and cost of raising capital in a given country, and it is Estonia s strong performance in this metric that establishes it as the outperformer in the region. Of the top -- countries that score highest for financing, nine are members of the EU, which reflects the depth of their financial sectors and their access to EU funding for Europe-wide infrastructure projects. ...
