Resilient infrastructure is the backbone of competitive economies, but can also contribute to inclusive and equitable societies. Its importance is fully recognized by the 2030 Agenda for Sustainable Development. Upgrading old, and building new infrastructure, is a clear priority. But how this will be financed in the Asia-Pacific region remains an open question which Public Private Partnerships - PPPs - can help us answer.
Our region’s infrastructure financing needs are vast. Emerging economies will need to invest as much as $26 trillion in infrastructure by 2030. We estimate the needs of the least developed, landlocked and small island developing countries to be equivalent to 10.5 per cent of their GDP. This far exceeds current levels of infrastructure funding. National budgets cannot close this gap alone. Private sector investment is needed and intelligently designed PPPs can attract it. While developing effective partnerships can be challenging, the Chinese experience demonstrates PPPs’ great potential. With more than 10,000 projects in the pipeline with a total value of $2 trillion, China has become the largest PPP market in the region.
Let me highlight three components ESCAP believes are essential to develop successful PPPs.
First, governments must buildthe right legislative framework and champion its use. Good progress has been made in this area. Three quarters of countries in our region have enacted PPP laws or adopted dedicated guidelines. Governments championing PPP programs at the highest level can then positively influence implementing agencies and provide certainty to the private sector.
Second, sufficient resources need to be allocated to PPP project development and selection, so those with the highest potential are implemented. The capacity to manage PPP projects within public entities must be reinforced so that risk allocation is balanced and projects structured to improve public services delivery. ESCAP is supporting this with a PPP capacity building programme - including an online training programme which I am pleased the China PPP Centre has recently adopted.
Third, good governance is essential. Corruption in infrastructure is equivalent to up to 20 per cent of construction costs in some countries, with billions lost every year. So procurement processes must be fair and transparent – fostering competition and value for money. Clear standards governing stakeholder consultation and environmental and social impact assessments must be upheld to deliver sustainable infrastructure solutions.
I see great value in promoting exchange of best practice among countries at different stages of development to improve the development impact of PPP projects in the Asia-Pacific region. ESCAP has been collaborating with a network of PPP Units to develop knowledge materials to support countries in their efforts. We welcome the China PPP Center’s proposal to work together to strengthen this work and are looking forward to taking forward this new collaboration.
I thank you for your attention and wish you a successful symposium.
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