Strengthening Private Sector Participation for Infrastructure in the Pacific Region

The “Strengthening Private Sector Participation for Infrastructure in the Pacific Region” held from 17-22 November 2008 in Brisbane, Australia, was organized by ADBI in close coordination with the Asian Development Bank Pacific Liaison Office (ADB-PLCO) and Bond University's Mirvac School of Sustainable Development, and in collaboration with a number of public and private sector organizations with a focal interest in PPPs. Over 20 mid- to senior-level government officials from the Pacific Region who are responsible for infrastructure, policy-making and infrastructure project design and implementation participated.

In his welcoming remarks, Michael Regan, Associate Professor of Infrastructure for Bond University's Mirvac School of Sustainable Development, stressed the significant role that infrastructure plays in economic development. Mr. Regan accentuated the importance of infrastructure delivery and PPPs as a procurement method for the Pacific Region, as well as the impact that private investment has on productivity and competitiveness in the region. He also underlined the advantages that PPPs offer in terms of lowering procurement costs, ensuring value for money, expanding infrastructure capital and innovation, and improving the outcome of services across the transport, water, energy and social infrastructure sectors.

In her opening remarks, Elaine Glennie, Senior Capacity Building Specialist for ADBI, indicated that a diverse group of leading PPP experts from the investment banking, finance, legal and technical fields, would be sharing their experience in PPPs across a number of sectors, and would outline the benefits and challenges offered by greater private sector participation and financing of infrastructure projects. Ms. Glennie also highlighted that a number of case studies particularly relevant for the challenges that small island states face would be profiled to enable a better understanding of PPP issues which they face, in addition to the key policy issues, points of negotiation to 'getting the deal through', and the modalities needed to overcome existing 'gaps' in the enabling environment and legal framework.

In the workshop's keynote speech, Mr. Paul Clauson, Executive Director of the Board for the Infrastructure Association of Queensland (IAQ) recognized that in small island economies and emerging markets project scopes will likely be smaller, reinforcing the need to establish a good sound playing surface upfront to encourage bidders and develop confidence. He also acknowledged the impact that the current financial situation has had, emphasizing that the cycle of business will turn inevitably to better times just as now it has turned for the worse and it is essential for governments worldwide to anticipate this lift and be prepared early to ride the new business cycle. He indicated that, in fact, now may be a good time to invest in infrastructure particularly in those projects that demonstrate low risk and are not as dependent upon user demand. Social infrastructure is one possibility in that it will always be required in a developing society. Mr. Clauson concluded his speech by saying that “all nations require at the very least convenient transport modes, schools and hospitals, clean water and sanitation at the very least in this world of plenty. I hope that this week's workshop will assist your nations in advancing these necessities.”

Day 1 of the program was entitled 'Infrastructure Development and Financing'. Sessions focused on reviewing the important linkages between infrastructure and economic growth and poverty reduction; ensuring a better understanding of the infrastructure financing challenges faced by countries in the Pacific and across the Asia-Pacific Region; and sharing experiences of the Asia-Pacific Region in attracting foreign direct and domestic investment to the infrastructure sectors and engaging the private sector in major infrastructure projects. Day 2 of the program was entitled 'Public-Private Partnerships - What, Why, and How should PPPs be Designed and Managed?'. Sessions reviewed what a PPP is, outlined the opportunities and advantages PPPs offer and the modalities that have evolved, and walked through the main phases of a PPP project development and management cycle. Day 3 of the program was entitled 'Bankable Deals - What Does It Take?'. Sessions outlined the key issues that need to be addressed for a project to be 'bankable' and explored global and regional lessons learned, best practices, and strategic approaches to resolving the key issues. Day 4 of the program was entitled 'PPPs - Sector Specific Issues and Approaches'. Sessions profiled selected case studies from physical and social infrastructure, as well as resource sectors, to determine the critical project design elements and points of negotiation that made the project bankable and brought the deal to a successful conclusion or resulted in a breakdown of the deal process. All case studies focused on issues relevant for situations and challenges faced by small island states in the Pacific Region.

Day 5 and Day 6 were entitled 'Prioritizing Policy Actions to Enable Acceleration of PPPs'. Sessions on both days enabled participants to assess the situational challenges that constrain PPP infrastructure projects in their respective countries and identify those priority actions needed to address or mitigate the constraints as well as strengthen private participation in infrastructure projects across the Pacific Region. On Day 5, field visits to PPPs in the proximity were organized to profile how PPPs have been successfully implemented. On Day 6, sessions initiated the previous day were continued, with the closing session summarizing the event's overall findings and conclusions.

The highly interactive six-day program integrated topical presentations made by highly experienced PPP technical advisors, together with open panel discussions and facilitated group sessions on critical PPP policy and design issues. All sessions encouraged participants to be actively engaged, and enabled them to explore a number of important PPP and infrastructure development issues and challenges in the Pacific Region that the participants currently face with the workshop resource persons and technical advisors. Group sessions were designed and structured to enable participants to prepare, by the end of the workshop, a prioritized action plan that will strengthen the enabling environment and legislative frameworks for public-private partnerships (PPP) and the development of a bankable pipeline of PPP infrastructure projects for their countries and the Pacific Region.