Growing demand for new and improved infrastructure across Europe bodes well for Austrian construction company PORR. With public entities keen to upgrade or completely replace underinvested bridges, roads, and railways, PORR is hoping to bid on many forthcoming developments. Its successful ability to win tenders will be underpinned by its close relationship with Credendo and the use of insurer-backed bid bonds and other guarantees.
PORR is the second-largest Austrian construction company. Founded in 1869, it is the oldest company listed on the Vienna Stock Exchange. PORR is involved in a variety of areas within the construction industry including roads, rail, tunnelling, building construction, and environmental engineering. Its key markets – which account for around 96% of its activity – are in Austria, Germany, Switzerland, Poland, Czech Republic, Slovakia and Romania.
Despite the current rocky macroeconomic environment shaped by the Russia-Ukraine war, an energy crisis, and global inflation concerns, PORR is anticipating a healthy pipeline of projects in its key markets over the next twelve to eighteen months.
“This is partly fuelled by investments in green projects linked to reducing polluting emissions, as well as a drive among some European countries to overhaul their public infrastructure,” says Stefan Ondra, Deputy Head Group Treasury at PORR.
“We all know there is a large amount of money coming from various bodies in the coming years such as the EU’s Green Deal, which will have links to infrastructure. So even beyond 2023 there is a big pipeline for the whole industry,” he explains.
“In many countries, there has also been a lack of maintaining infrastructure over the last ten or fifteen years. In many parts of Germany for instance, rail and road infrastructures are virtually at their end-of-life cycle – especially when it comes to bridges,” he adds.
Credendo supports PORR in all stages of a project’s life cycle, mainly with advance payment guarantees, performance and maintenance bonds.
For example, at the end of 2022, Credendo provided a EUR 15.4 million advance payment bond for a project PORR is working on for a large Austrian real-estate developer.
What Stefan Ondra appreciates when working with Credendo is its speedy service. “One of the greatest benefits is that they are one of the fastest and one of the least complicated insurers.”
PORR’s relationship with Credendo started five years ago with a small local facility in Poland via Credendo – Guarantees & Speciality Risks’ Polish subsidiary before it transferred its business to Credendo’s Austrian subsidiary.
Now PORR has a facility of EUR 50 million from Credendo covering all regions where PORR is active, and it is very much looking to strengthen its relationship with Credendo in the coming years.
“We started five years ago with something small at a local level and within a short period of time we have grown our cooperation to the benefit of both parties. We will try to further that cooperation,” Ondra says.