Although the topic of infrastructure may not attract bold headlines, the reality in many parts of the world is that the inadequate provision of critical infrastructure...
In Buenos Aires on 23 March, the G20 Finance Ministers announced that infrastructure would remain a priority for at least the next three years—a very welcome announcement for those in the private sector who have long called for greater global coordination of efforts in this area.
Over the last decade, much has been written about globalisation and how we’re more connected than ever before. In the infrastructure world, we think of connectivity as the “linkages of communities, economies and nations through transport, communications, energy, and water networks across a number of countries” .
When we as consumers decide to invest our money—whether through shares, bonds, or other instruments—we look at whether our investment will deliver a solid financial return. It makes sense then that the same risk-return principle is applied to investments in infrastructure.
Infrastructure can often be used as a pawn in the political chess game, not only at a federal level between political parties, but at a foreign policy level too. It’s crucial that a cross-border infrastructure project has political support and cooperation from all parties involved, and that it’s being supported not for political gain, but to further regional development. A lack of strong political leadership can be detrimental to a cross-border project, and weak capacity can be a deterrent to investors.
As outlined earlier in this blog series, private investors are looking for reliable returns to justify the risks that they are taking. Financing and procurement of cross-border projects will often be more complex than national projects due to the scale of the project and compounded risks, and the financial returns may be more uncertain than for national projects.
Risks can be hard to define, manage and mitigate. In infrastructure projects that cross regional or national borders and involve multiple parties from both the public and private sector, these risks may be amplified.
With a growing global focus on attracting private sector investment into infrastructure and utilising the public-private partnership (PPP) model, it is crucial that governments focus on the entire duration of a PPP contract. Efforts need to extend beyond ‘achieving financial close’ and beginning construction or ‘cutting the ribbon’ for commencement of services.
Disputes in public-private partnerships (PPPs) globally involving key performance indicators (KPIs) represent 20 per cent of all disputes, as highlighted in our data using a representative sample of projects from around the world.
Contractual disagreements and disputes are common in PPPs during both construction and operational periods.
The Output Specifications for Quality Infrastructure Reference Guide, helps governments to operationalise the definition of Quality Infrastructure Investment agreed on by G20 nations.
Risk allocation is at the centre of every PPP transaction, and a deep understanding of the risk allocation arrangements is a precondition to the drafting of every successful PPP contract.
The Reference tool is meant to serve as a practical tool to help governments and other stakeholders understand and implement the critical success factors that deliver inclusive infrastructure. The Framework for Inclusive Infrastructure summarises the following six Actions Areas and related practices that ought to be considered for the systematic implementation of inclusivity in infrastructure at the policy and project levels.
Members of the infrastructure community are warmly invited to the launch of InfraChallenge, an innovation competition aiming to accelerate the global infrastructure industry.
You’re invited to take part in a survey that will help us better understand the infrastructure community’s perceptions of a set of megatrends as they relate to the development of infrastructure to 2050.