Project 'brings opportunities for private sector'

The Belt and Road Initiative, which aims to enhance connections between China and Southeast Asian countries through infrastructure development, will provide unprecedented business opportunities for the private sector.

Such developments bring economic benefits such as boosting employment and industrial demand and will also assist the long-term development of manufacturing as well as international trade and logistics, market experts said at the Belt and Road Summit on Monday.

"There's a unique opportunity for all of the countries in the Association of Southeast Asian Nations (ASEAN) to enhance infrastructure development under the Belt and Road Initiative, as the infrastructure demand in Southeast Asia is great," said Jaime Augusto Zobel de Ayala, chairman of Philippines' largest conglomerate Ayala Corporation.

"And the enhancement of infrastructure linkage, such as the railway connection, will further keep global trade moving on," de Ayala told the summit.

He emphasized that there was a huge financing gap for infrastructure projects in Belt and Road countries; governments could only provide 40 percent to 50 percent of the funding. This gave private companies opportunities to join in. The railway project China proposed to link Southeast Asia with China would enhance foreign direct investment in the Philippines, de Ayala noted.

He said ASEAN countries should set a framework to bring the private sector into infrastructure development. This would balance the interests of each participant in the process. The public-private partnership (PPP) funding model could be used for public infrastructure projects.

"Some countries are more advanced in structuring PPP models than others. So we hope to have a sharing system of PPP structures and every country's experiences in using PPP models. Then, we can study how to make better use of PPP to do business with private corporations in the public sector," de Ayala added.

Chairul Tanjung, chairman of Indonesian conglomerate CT Corp, said: "All the infrastructure development requires huge amounts of money. Many projects are led by the government, financed by the government, but the government budget cannot cover all these projects.

"Thus the Indonesia government now is more open to use business to business model to attract private companies to finance the infrastructure projects," he said.

Risks always come with opportunities. Experts also warn that investors should pay attention to political, economic and financial risks in developing countries.

"We face various challenges when carrying out constructions in Belt and Road countries, including political risks, cultural conflict and technical risks," said Wen Gang, vice-president of State-owned rail builder China Communications Construction Company.

"The best way to avoid these is to fully understand the conditions of these countries, understand local people and their culture. We will also listen to advice from local partners and share profits with them," Wen said.

Frederick Ma Si-hang, chairman of Hong Kong's rail-network operator MTR Corp, said the key issue for Chinese companies investing in ASEAN countries was to study the risks first. Finding the right local partner was also very important, added Ma.

cherrylin@chinadailyhk.com

(HK Edition 09/12/2017 page18)