IFC Invests $5 Million in Infrastructure Web Site

(construction.com - 09/06/00)

By Judy Schriener

An infrastructure-oriented Web site started with seed money from Bechtel Enterprises Inc. now has snagged an initial $5 million investment from the International Finance Corp., with board approval to kick in up to another $5 million in subsequent rounds of financing. The IFC, which will also have a seat on the board, is the arm of the World Bank that helps arrange private financing for projects in developing countries.

InfrastructureWorld.com officially launched Sept. 7 at www.infrastructureworld.com, although it has quietly existed and been building content since June. It offers--for free--resources never before gathered and organized in one place. The Web site will focus on the entire spectrum of the development process for major infrastructure projects worldwide. Former longtime Bechtel exec Cordell Hull is the founder and CEO of InstructureWorld.com., based in So. San Francisco Former U.S. Secretary of State George Schulz is chairman of the advisory board.

"It's been difficult for smaller or medium-sized companies to participate in big global projects outside their home countries," says Hull. InfrastructureWorld will offer those companies the step-by-step information needed about every aspect of the development process, which should help level the playing field for those companies. That was what attracted the IFC to the venture, says Sujoy Bose, senior investment officer for infrastructure for the IFC. "We think it will increase competition, increase transparency...[and] provde full and equal information to people," he says. "We want to see it move into developing countries quickly."

InfrastructureWorld.com will provide links to between 30,000 and 50,000 infrastructure-related sites in what it is calling its "iwKnowledge" section. "We're thinking of making the information available to everyone basically for free," says Hull. That portion of the site is up and running now, whereas some other areas are still under development. They include iwCollaborate, which will offer online conferences and online access to conference papers; iwBusiness, which will include electronic dataroom hosting and arrangements to connect with financial institutions, insurors and other resources; iwFramework, which will host and share project data in a collaborative environment, similar to but beyond the capabilities of collaboration tools offered by Bidcom, Cephren (in which Bechtel is an investor) and the like, says Barbara Treat, managing director of InfrastructureWorld.com. The venture will partner with an undisclosed firm for that offering. "We have no interest in recreating the wheel if someone else has developed a really good product that addresses a need," says Treat.

"You save money because you take time out of the process, and it doesn't cost you $100,000 to send a team out to look at a data room," says Treat. Bose says the IFC interviewed a relatively small port developer in Brazil that had been unsuccessful in its bid to develop a port in Chile. "They said that if they had had something like InfrastructureWorld.com, they might have been able to save up to 50% of their costs on this bid" and might have learned more to effect a successful outcome, says Bose. "We think InfrastructureWorld.com is going to lead to the reduction of the cost of developing infrastructure worldwide." iwService will offer free advice on how to use the tools but will also provide consulting or expediting services for a fee. "A lot of people want to talk to a human being," notes Treat.

InfrastructureWorld.com will make its money through transaction fees down the road, as well as through fees it will charge partners that want to sign exclusive or semi-exclusive deals to be the financial institution, insurance company, etc., of choice. Also, the company will charge a fee for consulting or expediting the processes in developing countries.

Bechtel Enterprises is providing seed money but does not have a say in the site. ""We want to be a neutral site," says Hull. "Nobody's going to put their deals through InfrastructureWorld.com if they think it could be compromised," adds Treat. Bechtel's stake in InfrastructureWorld will lessen with each round of funding, which is a deliberate move. Bechtel does not see InfrastructureWorld.com as a competitor with its own e-business initiatives. "This is one of many of Bechtel Enterprises' technology investments in e-business," says Bechtel Enterprises spokesman Jeff Leichtman. "Bechtel itself is engaging in its own planning efforts in an e-business strategy. There is an e-Bechtel, and this is not it."

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