Skanska to stop bidding large-scale US P3s

Skanska has revealed it will no longer bid for “mega design-build P3 projects” in the US, despite having previously targeted the market over Europe.

The announcement from the Swedish development company follows a SEK900m ($100m) write-down on two P3s in the US, which it attributed to cost overruns and delays in the construction phase.

A spokesperson for Skanska confirmed to P3 Bulletin that the decision would only affect “extremely large projects” that come with high risks for the concessionaire, meaning it will still consider smaller scale P3 schemes.

However, the contractor also announced it would close down the project development function of its Infrastructure Development arm in the US, which focuses on three segments of P3s: highways, including bridges and tunnels; social infrastructure such as hospitals and schools; and utilities such as power generation stations.

This raises questions over Skanska’s global strategy, after it said in April that it considered the US to be “the primary market going forward” due to a thin P3 pipeline in Europe.

As part of its renewed strategy for the US, Skanska will also stop bidding for engineering, procurement and construction projects and exit the power sector after divesting existing operations.

The group took in a SEK400m ($44.4m) impairment charge for its planned exit from the power sector, expecting operating income of SEK500m ($55.5m) for the third quarter.