THE public-private partnership (PPP) financing model will continue to play a role in any ambitious infrastructure program, officials said at the Asian Development Bank (ADB) meetings.
Syed Afsor H. Uddin, chief executive officer of the PPP Authority in Bangladesh, said at the ADB annual meeting yesterday that some parts of an infrastructure program are suitable for PPP.
“Yes, there are challenges. PPP is, I would say, one of the most difficult structures to implement in any mechanism. Because you have just so many stakeholders they need to address. That’s why it takes time,” Mr. Syed said during the Private Sector Participation in Asian Infrastructure Development seminar held at the ADB headquarters.
“But I think it’s one of the best solutions we have to meet that huge [demand] in infrastructure,” he added.
He said some of Bangladesh’s PPP health clinics were built using the Philippine PPP system as a model.
The Philippine government has decided to limit its use of PPP, financing the early stages of many projects with its own funds or official development assistance, citing the need to get projects off the ground quickly.
Harold Tjiptadjaja, managing director of PT Indonesia Infrastructure Finance, who was a member of the panel at the seminar, said PPP is “one of the most transparent procurement processes.”
“We have to make sure that all government resources are applied properly and in cost-efficient ways toward the development of the whole projects in Indonesia,” Mr. Tjiptadjaja said.
He added that PPPs in Indonesia have “special privileges” because they are supported by certain government guarantees. This makes the PPP scheme “one of the best ways” to reduce the private sector’s risks, making participation in such projects attractive.
“So I think, at the end of the day, PPP will be still one of the drivers, especially when you look later on at Indonesia,” Mr. Tjiptadjaja added.
Joseph Bevash, managing partner of Latham & Watkins LLP’s Tokyo and Seoul offices said the Philippines is enjoying “a golden age” of infrastructure, sparking creativity in the structuring of projects.
He noted that the “Philippine solution” has helped the government avoid “multilaterals telling them how to do things or foreign investors coming in and telling them how to do things.”
“What you’re seeing is lots of domestic creativity which is again a sign of a developing market,” Mr. Bevash told reporters yesterday. — Janina C. Lim
