Asia's infrastructure needs private partnerships

MANILA - More public private partnerships ( PPP) are needed to boost infrastructure development in Asia Pacific, according to a new study commissioned by the Asian Development Bank (ADB).

"In order to leverage the $8 trillion required over the next decade for physical infrastructure in Asia, public financiers like ADB must undergo a complete change of mindset and shift their focus from sovereign projects to PPPs," ADB Deputy Director General Woochong Um said in a statement issued Wednesday.

According to a study conducted by the Economist Intelligence Unit (EIU), most Asia Pacific countries need more effective public sector oversight agencies and stronger political will to boost PPPs in infrastructure development.

The EIU used a benchmark index system to rank the readiness and capacity of a country to carry out sustainable and long term PPP projects.

The study revealed that Republic of Korea, India and Japan, are the top performing countries in Asia and the Pacific, reflecting their robust institutional and regulatory frameworks.

China also performed well with 614 PPPs reaching financial closure between 2000 and 2009. The study attributed this to the " strong willingness and capacity" of provincial governments to implement PPP projects, a friendly investment environment and the massive domestic market for infrastructure.

Vietnam, Mongolia and Papua New Guinea were at the lower end of the index, due to a lack of experience with PPPs and underdeveloped institutions and regulatory frameworks.

At the same time, the study notes that while overall prospects for PPP development remain bright, governments need to continue reforms and address capacity gaps for the design and implementation of effective projects.

"It is the capacity of the public sector to be able to react systematically to the complexities associated with PPP projects that will ensure long term success," the study said.