What is your dream?
Many people living in Peru dream of having a safe, well-built, multi-use bathroom that includes an adjacent area for a shower with a nice shower curtain and mirror and is constructed with bricks and cement, and has a wooden door and window. Sounds ordinary, right?
But for 2.4 million households in Peru this dream is out of reach because they have no access to credit lines, and the only way for them to construct an in-house bathroom would be by paying the entire construction cost upfront. This situation created an unexplored market estimated at $500 million – an amount large enough to attract private sector investors.
"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so."
– “The Big Short”
Forecasting traffic accurately is a very difficult and thankless task, as I explained in my previous blog: Traffic Risk in Highway PPPs, Part I: Traffic Forecasting. As such, this gives rise to very real financial risks if these forecasts turn out to be wrong. This risk has crystallized many times as manifested in high-profile distressed projects, bankruptcies, renegotiations and bailouts.
So what’s driving the inaccuracy and resulting risk in traffic forecasts? In the forthcoming Public-Private Infrastructure Advisory Facility (PPIAF) and Global Infrastructure Facility (GIF) publication, Toll Road PPPs: Identifying, Mitigating and Managing Traffic Risk, which will be published on the PPP Knowledge Lab later this month, we postulate that forecasting inaccuracy comes from three sources:
Photo by Adam Gregor/ Shutterstock.com
The theme of this year’s Global Infrastructure Forum was delivering sustainable and inclusive infrastructure. As a woman who works in the world of infrastructure, I was invited to join a panel at the forum made up solely of women to address gender inclusivity and was asked to provide a specific example of a project beneficial to women. The first thing that came to mind was our solar project in Senegal, which has not only opened up the country to solar for the first time, but has also empowered local women through training in business skills through an organization called Empow’Her that was linked to the project.
This blog originally appeared on David Baxter’s LinkedIn page.
Much is written about Public-Private Partnerships (PPPs) from the perspective of the public sector, but one often forgets the private sector forms its own perspectives based on national and domestic market perceptions as well. These perceptions are always based on the availability of reliable qualitative and quantitative information.
Discussions with private sector leads has revealed that information gaps, more often than not, have proven to be obstacles that have resulted in “no-go” decisions on poorly articulated procurements initiated by inexperienced public sector procurement officers. Overcoming private sector hesitation is pertinent to the success of a procurement.
Photo: Jorge Franganillo | Flickr Creative Commons
This is the first of a three-part series on traffic risk in PPPs
Prediction is very difficult, especially about the future.
– Professor Nils Bohr, Nobel Laureate
Professor Bohr was right: prediction is hard work. As a species, we don’t have difficulty making predictions. I, for one, frequently make doom-laden predictions on a diverse range of subjects ranging from politics to the fortunes of my beloved football team, Liverpool Football Club.
No, the problem is that humans, as a rule, are not very good at predictions. Sadly, that illusive ‘crystal ball’ still has not been invented. And the sheer complexity of living on an ever-changing and evolving planet alongside 7 billion equally complex individuals—all making unique but increasingly interdependent decisions—makes even the most straightforward predictions difficult.
Photo: Fernando C. Vieira/Grupo CEEE | Flickr Creative Commons
The PPP Professional Certification, the CP3P, is an extraordinary tool that enables professionals in infrastructure segments around the world to have a common language for terms involved in structuring and managing a Public-Private Partnership (PPP) project. Support for standardizing the process of PPP projects, has improved overall understanding and enabled institutional organizations and governments to successfully model projects and mitigate risks.
Recent conversations I have had about the value of regulation and private participation in telecoms has prompted me to do some quick calculations using the Caribbean as a test case. The results? Market reforms have had significant impacts in the region.
Reforms in the Caribbean began in the late 1980s although start times vary greatly across the region. Drives varied, including prompting by the World Bank Group, by the United States, and by potential private investors. Sometimes leading countries in the region served as examples for others to follow.
Photo: Jonathan Meddings | Flickr Creative Commons
The United Kingdom has been a leading player in the development of Public-Private Partnerships (PPPs) since the inception of the Private Finance Initiative (PFI) in the early 1990s. PFI is a structure that introduced project finance into UK public services for the first time. Under PFI, a private sector consortium builds public assets and services them over a term of 25 to 30 years in exchange for an availability payment. Successive governments have taken full advantage of the policy’s ability to leverage private finance and thus generate additional infrastructure investment, beyond typically constrained capital budgets.
An often under-reported feature of the UK’s PPP policy is the variety of approaches it takes.
In New York on September 25, 2015, an extraordinary event took place: 200 developed and developing countries agreed on the Sustainable Development Goals (SDGs). The development of sustainable infrastructure is at the core of the SDGs. Unfortunately, to procure such infrastructure, a constant issue is inadequate financing.
Recently, there has been an increased emphasis on crowding in private sector financing to alleviate these deficiencies. To do so, infrastructure governance and decision-making processes need to improve. If we fix the governance gap and help governments make choices that are transparent, clear and standardized, projects will be better chosen and designed; funding mechanisms (either user fees or government payments) will be more credible; private investors will feel more secure; and investment will follow. To begin to address these points, it is important to understand what the key challenges for infrastructure governance are.
The APMG PPP Certification Program enables participants to take their skills to the next level, and the Certified PPP Professional (CP3P) credential is a means to officially convey that expertise and ability. Whether you’re thinking about signing up, or already enrolled, in this series we share some insight from practitioners who have already passed the test. This week, we caught up with Paul Barbour, Senior Risk Management Officer at the Multilateral Investment Guarantee Agency (MIGA). Read his answers below.