TRANSPORT
Risks and Crisis Issues for
International Corporations in the Transportation
Sector – BRICS Countries
The transport sector in BRICS countries presents immense opportunities for international corporations due to rapid urbanization, population growth, and rising demand for mobility and freight solutions. However, this sector is deeply exposed to systemic challenges such as underinvestment in infrastructure, fragmented regulatory frameworks, and political interference. Government policies often prioritize state-owned enterprises or domestic firms, especially in public transportation and rail, creating competitive disadvantages for foreign entrants. Moreover, corruption, inefficient procurement, and delays in public-private partnership execution are recurring issues that disrupt project timelines and profitability.
Over the past five years, transport sector experiences in BRICS countries have been mixed. In India, major investments in metro systems, road corridors, and logistics parks have attracted global players like Alstom and Bombardier, though land acquisition and cost overruns remain chronic problems. Brazil has advanced some infrastructure concessions, yet political instability and economic volatility have slowed private investment. In Russia, international transport firms have withdrawn due to sanctions and geopolitical tensions, freezing major urban mobility projects. China's transport infrastructure continues to expand aggressively through state-driven programs, but foreign firms face steep barriers in rail and urban transit due to strategic sector classification. In South Africa, despite heavy need for transport upgrades, challenges such as unreliable energy supply, corruption in state entities, and social unrest have undermined foreign investor confidence.
Beyond infrastructure, operational risks are also high. Poor maintenance, safety lapses, and climate vulnerability (e.g., flooding, heatwaves) frequently disrupt service continuity. Additionally, rising ESG and decarbonization demands are transforming the regulatory landscape, requiring green transport solutions that may not yet be viable under current conditions in some BRICS markets. For international corporations, success depends on navigating political sensitivities, building strong public sector alliances, and structuring risk-sharing mechanisms in complex public-private environments.
5 Key Risks
to Consider before Entering BRICS Transportation Markets:
1. Regulatory and Concession Risk – Complex licensing regimes, political interference, and renegotiation of concession terms.
2. Infrastructure and Maintenance Deficits – Poor-quality roads, rail, and transit systems creating safety, delay, and cost risks.
3. Political and Sovereign Risk – Project delays or cancellations due to policy shifts, elections, or fiscal constraints.
4. Corruption and Procurement Risk – Exposure to non-transparent tender processes and reputational risks in state-linked deals.
5. Climate and Environmental Risk – High exposure to extreme weather events and emerging emissions regulations affecting transport operations
TO GO FURTHER
CRISIS MANAGEMENT
Know-How, Tools & Resources for Crisis Resolution
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Crisis Assessment & Source Identification
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Crisis Management Coordination
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Crisis Containment & Damage Control
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Crisis Communication & Media Kit
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Crisis Cell Infrastructure
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Crisis Simulation Training [New]
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Business Recovery Plan & 361° Review