European engineering companies have been at the forefront of complex projects not just at home, but also in Africa, Asia and Latin America for over a century. They have left their mark across the world, from the Suez Canal (Egypt) to the Itaipu Dam (Brazil-Paraguay) or the Palm Islands (UAE).

Moreover, engineers have a tradition of long-lasting engagement in the local market, opening offices and providing employment, cooperating with universities and helping both public and private stakeholders develop. Even if the European market remains central, projects in other countries are often key components in the engineering companies鈥� business.

However, the evolution of relevant European Union policy over the last decades has changed much of the context and the approach for engineering companies when working outside the EU. There is a broader and stricter set of rules and goals to adhere to, from those related to climate change and sustainability to those concerning the political principles upheld by the EU, human rights or free and fair competition being the best examples.

Moreover, the EU is a major donor to developing countries. Support is provided either directly to the governments (grants) or via the European Investment Bank (EIB) and the national development agencies, e.g. France鈥檚 AfD or Germany鈥檚 KfW.

Today鈥檚 challenges

These aspects have increased both the complexity and quality of the engineers鈥� projects but have also led to market loss. Apart from the 鈥榥o go鈥� projects determined by the EU rules, this is mostly due to the tendency of many stakeholders from recipient countries, particularly in the public sector, to benefit from EU funding without fully respecting the aid and/or market rules.

Furthermore, engineering companies from other countries often benefit from direct or indirect subsidies and other advantages which create unfair competition, not to mention the lower quality of projects that they often offer.

Finally, EU rules are considered too lax compared to those of other donors such as the US or Japan, which tie part of their development funds to the involvement of national companies, particularly when it comes to technical assistance.

The stakes are far-reaching, both in terms of the sums of money involved and the impact. The EU鈥檚 main instrument in this case is the Global Gateway, a new European strategy to support investments in the digital, energy, transport, health, education and research sectors across the world, fully aligned with the UN鈥檚 Agenda 2030 and its Sustainable Development Goals, as well as the Paris Agreement. Its aim is to mobilise up to 鈧�300 billion of investments for sustainable and high-quality projects between 2021-2027, with around half of it dedicated to the Africa-Europe Investment Package.

The funding opportunities coming from EU member states must also be considered here 鈥� even if governments design specific rules for their national funding entities, they must still act within the broader EU legal and policy framework.

Yet these ambitious targets are easily jeopardised if projects are not performed at the appropriate quality and in an acceptable timeframe, something that is bound to happen if the relevant policy and procurement rules are not properly implemented and applied. On top of that is the growing concern over how the EU funds will be used and by whom, given the past experiences.

Our sector鈥檚 response

Today there is a significant desire from both the EU institutions and the stakeholders from the built environment (contractors, engineers) and the transport (particularly railways) sectors to change this situation, from both a political and legal point of view.

Work has been on-going throughout 2024 between the delegations of EFCA, EIC and UNIFE (the European Rail Industry Association) and their members with European Commission (EC) and EIB officials, to come up with a set of solutions that mitigate the risks of EU companies interested in participating in EU-funded projects abroad, while also ensuring that the best value for money can be delivered to the clients.

EFCA鈥檚 main recommendations concern the setting-up of project preparation and financing facilities to identify, prepare and assist EU Delegations in promoting the relevant projects in the countries where they are based. 鈥淲e believe that an integrated European value proposition can be more attractive and competitive, but we need to be better organised, adapt our procurement rules and define attractive financial packages鈥� says EFCA president, In茅s Ferguson. This view is supported by the other private sector representatives.

There is already a broad consensus regarding the importance of identifying and preparing sound and policy-aligned transport projects, a step where the engineers鈥� role is critical. The need for a new integrated approach was also shared by all parties, in which the European companies are involved from the very early phases, and where EU technology, standards and financing instruments make a difference in partner countries, with lower total costs and higher sustainability impacts.

It is also necessary to have a 鈥榖ottom-up鈥� approach, starting from the clients鈥� needs and focusing on demonstrating the value brought by the European integrated approach to project implementation and delivery. Finally, a change in the relevant EU legislative acts (competition, procurement, aid) to ensure this approach and tackle unfair competition should also be considered.

The meetings with the EU, EIB and the other private sector partners will continue in 2025, to ensure the best solutions for clients in the development countries and for the EU companies alike. The solutions may include, for instance, drafting a list of transport projects that are a priority for partner countries in Africa and where European companies can bring a significant added value.