Photo: Adam Cohn | Flickr Creative Commons
India, until recently the fastest growing economy in the world, realized long ago the need for developing infrastructure to fuel its growth. The government also realized that doing so with public funds would not be sufficient. Hence, India rolled out one of the largest Public-Private Partnership (PPP) programs in the world over the first decade of the 21st century.
But India’s massive program also brought with it some challenges, which eventually slowed down the growth of PPPs over the last five years. Yet, this was not the end of the program or our national infrastructure ambitions. This was a learning period, and the relevant government agencies have been efficient in mapping out the constraints that plagued the PPP market and are working on policies to remedy them. It remains to be seen whether or not the implementation of these corrective measures will put the jewel back in the crown of Indian PPPs, but it is a step in the right direction.
As infrastructure projects are increasingly decentralized to sub-national governments (SNGs) in many countries, policymakers are keenly interested in developing sub-national bond markets to open up access to private-sector financing. However, the transaction costs of bond issuance are still prohibitive for small SNGs.
Pooled financing—through regional infrastructure funds, municipal funds, or bond banks—is being explored as a solution. Yet, many questions remain:
Photo: Roberto Maldeno | Flickr Creative Commons
Infrastructure in Ukraine, Europe’s largest country, is extremely underdeveloped. Without significant investment, it cannot support the existing or future needs of our economy or population. The reasons are many: decades of mismanagement under Soviet rule, economic crisis, and more recently, the conflict in the Donbass. Given that these constraints go beyond a simple lack of funding, our government is partnering with the Global Infrastructure Facility (GIF), as well as other international partners such as the European Bank for Reconstruction and Development (EBRD) and the World Bank.
Welcome to the “10 Candid Career Questions” series, introducing you to the infrastructure and PPP professionals who do the deals, analyze the data, and strategize on the next big thing. Each of them followed a different path into infra and/or PPP practice, and this series offers an inside look at their backgrounds, motivations, and choices. Each blogger receives the same 10 questions that tell their career story candidly and without jargon. We hope you will be surprised and inspired.
What is your dream?
Many people living in Peru dream of having a safe, well-built, multi-use bathroom that includes an adjacent area for a shower with a nice shower curtain and mirror and is constructed with bricks and cement, and has a wooden door and window. Sounds ordinary, right?
But for 2.4 million households in Peru this dream is out of reach because they have no access to credit lines, and the only way for them to construct an in-house bathroom would be by paying the entire construction cost upfront. This situation created an unexplored market estimated at $500 million – an amount large enough to attract private sector investors.
"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so."
– “The Big Short”
Forecasting traffic accurately is a very difficult and thankless task, as I explained in my previous blog: Traffic Risk in Highway PPPs, Part I: Traffic Forecasting. As such, this gives rise to very real financial risks if these forecasts turn out to be wrong. This risk has crystallized many times as manifested in high-profile distressed projects, bankruptcies, renegotiations and bailouts.
So what’s driving the inaccuracy and resulting risk in traffic forecasts? In the Public-Private Infrastructure Advisory Facility (PPIAF) and Global Infrastructure Facility (GIF) publication, Toll Road PPPs: Identifying, Mitigating and Managing Traffic Risk, we postulate that forecasting inaccuracy comes from three sources:
Photo by Adam Gregor/ Shutterstock.com
The theme of this year’s Global Infrastructure Forum was delivering sustainable and inclusive infrastructure. As a woman who works in the world of infrastructure, I was invited to join a panel at the forum made up solely of women to address gender inclusivity and was asked to provide a specific example of a project beneficial to women. The first thing that came to mind was our solar project in Senegal, which has not only opened up the country to solar for the first time, but has also empowered local women through training in business skills through an organization called Empow’Her that was linked to the project.
Much is written about Public-Private Partnerships (PPPs) from the perspective of the public sector, but one often forgets the private sector forms its own perspectives based on national and domestic market perceptions as well. These perceptions are always based on the availability of reliable qualitative and quantitative information.
Discussions with private sector leads has revealed that information gaps, more often than not, have proven to be obstacles that have resulted in “no-go” decisions on poorly articulated procurements initiated by inexperienced public sector procurement officers. Overcoming private sector hesitation is pertinent to the success of a procurement.
Photo: Jorge Franganillo | Flickr Creative Commons
This is the first of a three-part series on traffic risk in PPPs
"Prediction is very difficult, especially about the future."
– Professor Nils Bohr, Nobel Laureate
Professor Bohr was right: prediction is hard work. As a species, we don’t have difficulty making predictions. I, for one, frequently make doom-laden predictions on a diverse range of subjects ranging from politics to the fortunes of my beloved football team, Liverpool Football Club.
No, the problem is that humans, as a rule, are not very good at predictions. Sadly, that illusive ‘crystal ball’ still has not been invented. And the sheer complexity of living on an ever-changing and evolving planet alongside 7 billion equally complex individuals—all making unique but increasingly interdependent decisions—makes even the most straightforward predictions difficult.
Photo: Fernando C. Vieira/Grupo CEEE | Flickr Creative Commons
The PPP Professional Certification, the CP3P, is an extraordinary tool that enables professionals in infrastructure segments around the world to have a common language for terms involved in structuring and managing a Public-Private Partnership (PPP) project. Support for standardizing the process of PPP projects, has improved overall understanding and enabled institutional organizations and governments to successfully model projects and mitigate risks.