I had an engaging conversation with a group of employees of a multilateral development bank (MDB) early this month. It began with a very direct question: Why should MDBs support Public Private Partnerships (PPPs) as components of their loans? Is it not too risky?
I have been a PPP practitioner for over ten years. During this time I have defended the use of PPPs in many different contexts to several different audiences. I have talked service users into supporting PPPs on the basis of better services and operational flexibility that could empower users. I have convinced political player to approve PPPs because they would benefit from faster delivery of assets and fewer government-retained risks. I have brought bureaucrats on board after stressing that they would achieve value for money and retain a more noble role of service regulation, instead of execution.
At the inaugural ceremony in the Great Hall of the People, Chinese President Xi Jinping reaffirmed the new institution's mission, saying that "Our motivation [for setting up the bank] was mainly to meet the need for infrastructure development in Asia and also satisfy the wishes of all countries to deepen their co-operation."
Indeed, the AIIB is a major piece of China's regional infrastructure plan, which aims to address the huge needs for expanding rail, road and maritime transport links between China, central Asia, the Middle East and Europe. But the AIIB should also represent a huge opportunity for cooperation not only between countries in the region but also with other multilateral development banks.
Our experience working on transport mega-projects co-financed by several multilateral development banks (MDBs) already shows that this collaboration is much needed and critical for the success and viability of mega-projects. The most recent experience with the Quito Metro Line One Project, for example, shows that the co-financing banks – World Bank, Inter-American Development Bank, Andean Development Corporation and European Investment Bank – brought not only their financial muscle but also their rich and diverse global knowledge and experience. Incidentally, because of the Quito Metro project, all the MDBs involved in the project were dubbed as the “musketeers, ” precisely due to the high degree of collaboration and team work that is making this project a success.
- East Asia and Pacific
- Latin America & Caribbean
- Bus Rapid Transit
- BRT systems
- public transit
- public transport
- public transportation
- infrastructure financing
- infrastructure financing gap
- multilateral development banks
- MDB collaboration
- asian infrastructure investment bank. aiib
On the 26th of September 2003 my best friend Jonathan was killed in a car crash in Nairobi, Kenya in East Africa. Jonathan was only 19 years old and had just joined University three weeks prior to the road crash to pursue a degree in information technology. A speeding drunk driver rammed into the vehicle Jonathan was in; causing the car to spin out of control severally. Jonathan along with another friend, were killed on the spot.