By the Philippine News Agency
Countries in the Asia Pacific region should craft policies that enable the growth of private sector participation on transport infrastructure projects, the Asian Development Bank (ADB) said.
ADB President Takehiko Nakao said the private sector has a significant role in infrastructure development in Asia due to its expertise and capability to develop new technologies in transportation.
“We support enacting a PPP (public-private partnership) law. We need a clear set of framework for private sector to join in PPP work. In countries like Vietnam, Indonesia and the Philippines, we are setting up PPP offices to provide financing on projects,” Nakao said during a transport forum hosted by the ADB in its headquarters at Ortigas Center, Mandaluyong City on Wednesday.
“PPP is important because it is directly connecting financial resources of private sector together with the expertise of doing things,” he added.
The ADB is eyeing to increase private sector lending in countries that have significant infrastructure needs. “We are now targeting smaller economies in more challenging conditions. It is important to promote the private sector through our lending and creating investments in these countries,” Nakao said.
Transport infrastructure is important as it promotes systems that are safe and accessible for all, Nakao added.
Low carbon transport modes such as public transport, railways and electric vehicles help combat climate change, he said.
Former ADB vice president Lawrence Greenwood said the private sector can provide the necessary financial support on addressing the gaps in spending for transport infrastructure projects in Asia Pacific.
The transport sector in the Asia Pacific requires more than USD8.4 trillion investment by 2030, according to ADB estimates.
“The funding of that at around 90 percent comes from the government. The question is how much more needs to be funded by the government. You still have a gap of around USD 200 billion a year that needs to be filled by some other sources so the private sector needs to fill in that gap… The challenge is how we can get more private sector funding on infrastructure projects,” Greenwood said.
Private sector funding can be increased through the implementation of PPP projects and foreign direct investments in existing companies and state-owned enterprises.
The ADB has recently approved a USD300 million loan to the Philippines to help in creating policies that would allow more PPP projects under the Build, build, build program of the Duterte administration.
The program aims to invest around P8-9 trillion to build 75 flagship infrastructure projects including new airports, bridges, railway systems, among others by the end of the Duterte administration in 2022.
The PPP Act which aims to amend the Build Operate Transfer Law to accelerate the implementation of PPP projects is pending before Congress.