The infrastructure deficit in Asia is so enormous that we can't expect either private investors or the public sector to take on the challenge alone. We need collaboration between private and public players to make things work, and to bring critical services to the community, said Michael Barrow, Deputy Director General in ADB's Private Sector Operations Department.
ADB estimates that the Asia and Pacific region needs $800 billion every year in infrastructure investment until 2020. Governments alone will not be able to bridge the infrastructure gap. But to foster strong PPPs, they need to provide incentives and the right climate for private investments.
Good infrastructure is critical to economic growth, allowing communities to access essential social services, markets, and jobs, and making cities cleaner and easier to navigate.
PPPs can help developing countries address critical infrastructure needs, from roads to hospitals to water supply systems. The PPP investment mode, with the various structures underpinning it, is especially effective in helping centrally planned countries transition to private sector-oriented market economies.
PPPs can be promoted through fully assessed and appropriate risk sharing and performance-based arrangements between the parties. The aim is to deliver value-for-money projects to provide a full set of benefits for investors, the public, and the economy.
Aside from having the right laws and regulations, Asian economies need to ensure that PPP projects are developed and delivered in professional, informed ways. Although increasing efforts are being made to prepare PPP projects, PPPs often still suffer from a bankability gap.
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