News Column

More Public-Private Partnerships Can Help Meet Development Challenges

May 2, 2014



ASTANA, Kazakhstan, May 2 -- The Asian Development Bank issued the following news release:

Developing Asian economies can and should create more public-private partnership (PPP) opportunities to address the region's infrastructure gap and steer private money and skills into much-needed infrastructure projects, said speakers at a seminar at the Annual Meeting of the Asian Development Bank's (ADB) Board of Governors.

"The infrastructure deficit in Asia is so enormous that we can't expect either private investors or the public sector to take on the challenge alone. We need collaboration between private and public players to make things work, and to bring critical services to the community," said Michael Barrow, Deputy Director General in ADB'sPrivate Sector Operations Department.

ADB estimates that the Asia and Pacific region needs $800 billion every year in infrastructure investment until 2020. Governments alone will not be able to bridge the infrastructure gap. But to foster strong PPPs, they need to provide incentives and the right climate for private investments, participants at the Vision to Reality: Making PPPs Work seminar, co-sponsored by PriceWaterhouseCoopers, heard.

Good infrastructure is critical to economic growth, allowing communities to access essential social services, markets, and jobs, and making cities cleaner and easier to navigate.

PPPs can help developing countries address critical infrastructure needs, from roads to hospitals to water supply systems. The PPP investment mode, with the various structures underpinning it, is especially effective in helping centrally planned countries transition to private sector-oriented market economies.

PPPs can be promoted through fully assessed and appropriate risk sharing and performance-based arrangements between the parties. The aim is to deliver "value-for-money" projects to provide a full set of benefits for investors, the public, and the economy.

The ADB seminar discussed how more can be done to attract private and institutional investors and local and international debt providors into PPPs. It also addressed the constraints to delivering successful PPP projects.

Aside from having the right laws and regulations, Asian economies need to ensure that PPP projects are developed and delivered in professional, informed ways. Although increasing efforts are being made to prepare PPP projects, PPPs often still suffer from a bankability gap.

The seminar was attended by public officials and private bankers and investors, with discussions led by Steven Ciobo, Parliamentary Secretary to the Australian Treasurer; Shigeru Kiyama, Vice President of the Japan International Cooperation Agency; Laurene Mahon, Managing Director of Infrastructure Finance at CIBC World Markets; Galymbek Mamrayev, Vice-chairman of the Board of the Kazakhstan Public-Private Partnership Center JSC; and Arvind Mayaram, Secretary of India'sDepartment of Economic Affairs.

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