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Hochtief CEO says few orders cancelled so far

German construction company Hochtief has had barely any order cancellations amid the economic crisis and is on track to hit its earnings goal for 2008, its chief executive told the Financial Times.

Hochtief is set to reach its target of a year-on-year increase in pretax profit for 2008, CEO Herbert Luetkestratkoetter said in an interview with the newspaper published on Monday.

The German construction group is benefiting from government-sponsored infrastructure investments in emerging markets and from relatively low borrowing costs due to a modest ratio of debt to equity capital, the FT reported.

“I am very confident that we will profit a lot from the newly installed infrastructure programs around the world,” the CEO was quoted as saying.

Still, there is a danger that such programs “will have difficulties to be executed as they will run into financial trouble” if the financial crisis deepens, he added.

Speaking in the same interview, Luetkestratkoetter criticized the European Central Bank's tendering process for its new headquarters in Frankfurt.

The ECB has divided the construction project into 15 separate calls for bids after the tender for the entire development attracted only one bid, the FT reported.

“These kind of projects will turn out to take longer, be less predictable, more expensive, and the quality will probably be worse,” the CEO said. (Reuters)