Europe’s infrastructure dreams start to come true

{"text":[[{"start":5.28,"text":"In July, more than a kilometre beneath the Alpine town of Brenner, workers broke through the final barriers of rock separating Austria and Italy."}],[{"start":13.9,"text":"The resulting Brenner Base Tunnel, a 64km continuous underground corridor linking the two countries, is set to become the world’s longest underground railway. It is part of a multibillion-euro EU policy initiative, known as the Trans-European Transport Network (TEN-T), that was launched decades ago to improve links across the continent."}],[{"start":36.32,"text":"Mega-projects such as this one have boosted Europe’s construction and engineering sector. Most of the contracts have gone to EU-based companies and are beginning to drive growth despite labour shortages and the recent surge in inflation and the cost of borrowing."}],[{"start":50.8,"text":"“The vast majority of TEN-T mega-projects are going to EU-based firms,” says Laura Rebollo Mañueco, infrastructure analyst at global data firm Fitch Solutions."}],[{"start":61.96,"text":"Her company has reviewed over 30 contracts that have been awarded in recent years under the EU’s TEN-T framework, which defines and sets out the requirements for building out the vast infrastructure network of railways, roads and inland waterways. Of these, only 27 per cent were awarded to consortiums or joint ventures containing at least one company that was not from the EU and only 3 per cent contained a company that was not based somewhere on the European continent."}],[{"start":null,"text":""}],[{"start":89.72,"text":"In its latest announcement of funding for transport infrastructure projects, the European Commission allocated 77 per cent of the total €2.8bn to railway projects."}],[{"start":99.88,"text":"“The rail sector will be a significant focus of infrastructure spending in Europe over the coming years,” says Rebollo Mañueco, adding that transport development will lead growth in the construction industry up to 2035."}],[{"start":null,"text":""}],[{"start":113,"text":"The rate of growth in the construction industry was 2.4 per cent in 2025 and is expected to hover around 2 per cent yearly in the decade to come, according to BMI, Fitch Solutions’ industry research arm."}],[{"start":125.6,"text":"Key initiatives include Rail Baltica, a 1,230km high-speed rail project linking Poland and the Baltic states and the Fehmarnbelt Fixed Link, a rail-road connection between Denmark and Germany, which will be the world’s longest underwater tunnel. Further south, the Lyon-Turin rail link, which includes a 58km cross-border tunnel between France and Italy, is also under construction."}],[{"start":150.36,"text":"“These infrastructures are essential for mobility, for the single market, for competitiveness, for defence and for European resilience,” says Annemie Turtelboom, member of the European Court of Auditors, the EU’s independent external auditor."}],[{"start":164.96,"text":"Yet despite the promise of long-term financial reward, the construction and engineering sector faces significant difficulties meeting expectations on delivery and costs."}],[{"start":174.84,"text":"“The US-Iran conflict has become a significant disrupter to the construction industry,” Rebollo Mañueco says. Small and medium-sized enterprises, which make up a large proportion of the companies in the region’s construction sector, are particularly vulnerable to rising prices and higher financing costs, she adds."}],[{"start":null,"text":""}],[{"start":193.84,"text":"Labour shortages represent another challenge facing EU construction companies, with an estimated 2mn more workers needed by 2030, according to 2025 estimates from the European Construction Industry Federation."}],[{"start":206.24,"text":"“Labour availability and rising costs remain significant constraints,” says Nicola Sandri, a senior partner at consulting firm McKinsey who heads the company’s infrastructure team. Construction had the highest job vacancy rate of any euro-area sector in the second quarter of the year at 3 per cent, according to his estimates."}],[{"start":225.72,"text":"These challenges have contributed to significant delays and cost overruns. Turtelboom, the lead auditor of a report on the state of EU infrastructure works published in January, says the combined estimated cost of eight flagship projects — including the Brenner Base Tunnel and Rail Baltica — reached €66.5bn this year, an 82 per cent increase on 2019 estimates."}],[{"start":null,"text":""}],[{"start":249.96,"text":"Rail Baltica’s budget quadrupled from its 2017 estimate to €24bn in 2024, the report found. Turtelboom estimates that the projects face an average delay of 17 years, meaning most of them will miss their 2030 completion deadline."}],[{"start":265.44,"text":"Some of the delays encountered are due to factors beyond anyone’s control, such as the Covid pandemic and soaring energy and raw materials costs, Turtelboom adds."}],[{"start":273.94,"text":"But she also points to other issues, including diverging priorities among member states, failure to properly involve local communities resulting in lengthy court procedures, varying tender procedures and geological excavation challenges."}],[{"start":287.44,"text":"Many of these problems are specific to the nature of a large-scale multinational cross-border project, says Sandri."}],[{"start":294.92,"text":"But the delays and ballooning costs also point to the EU’s growing difficulty in co-ordinating projects across member states with disparate political priorities, he adds. “The challenges are increasingly structural rather than exceptional.”"}],[{"start":312.28,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1794398260_1545.mp3"}