GI Hub Principal Advisor, Jack Handford, attended the 2017 Asia PPP Practitioners’ Network Conference held in Seoul, South Korea, on 29 November to 1 December. Mr Handford presented in the first session on PPPs and sustainable growth and was designated discussant in the second session on sustainable infrastructure.
Mr Handford's presentation in the first session centered around three key topics:
- the economic growth associated with infrastructure development and how the PPP model plays a role
- attracting private sector investment into infrastructure
- retaining the benefits of PPP infrastructure throughout the asset lifecycle.
Specifically, Mr Handford spoke about GI Hub’s 2017 version of its Global Infrastructure Investor Survey. It focussed on two conclusions from the survey:
- 90 per cent of investors indicated that they want to increase their allocations in infrastructure—up from 65 per cent from last year
- 37.5 per cent of investors invest in emerging markets—up from 20% last year.
He went on to note that one implication of this for government representatives is the need to bring good quality bankable PPP projects to market. Integral to this is PPP risk allocation, which sits at the centre of every PPP transaction.
For this, GI Hub prepared its PPP Risk Allocation Tool in 2016. It looks at the allocation of risks between the public and private sectors in typical PPP transactions for 12 project types across the transport, energy, and water and sanitation sectors. GI Hub also recently conducted its 2017 regional PPP risk allocation workshops which saw involvement from over 100 government representatives from 22 countries in three key regions—Asia, Africa and Latin America.
Finally, Mr Handford spoke about the importance of good PPP contract management throughout the whole life of a PPP contract, also mentioning the status of GI Hub’s upcoming PPP Contract Management Tool, expected to be delivered in the first quarter of 2017.
Additional presentations in the first session came from Korea’s Public and Private Investment Management Centre, Korea’s PPP Policy Division within its Ministry of Strategy and Finance, China’s PPP Centre and the Global Green Growth Institute.
The first part of the second session on sustainable infrastructure involved presentations from Korea, Japan and the World Bank. It concluded with representatives from the Philippines, Pakistan, India, Mongolia, Cambodia, Myanmar, Bangladesh, Vietnam and Thailand speaking to the PPP environment in their jurisdictions and included some lively discussions around the role of state-owned enterprises in PPPs.
Session three on recent trends and innovations in PPPs on the second day involved important dialogue between government representatives and private sector representatives from the transport and energy sectors. The discussion focused on what the private sector looks at when deciding to invest in a new jurisdiction and the need for clear communication and collaboration between public and private sectors.
Representatives from the Asian Development Bank and Ernst & Young also presented in this session and officials from the Indonesian Government provided an in-depth look at the recent developments in Indonesia’s PPP ecosystem, including a presentation from the newly formed Government Property Management Institution which focuses on land acquisition issues. Focussing on Indonesia was a new addition to the Asia PPP Practitioners’ Network format and the intention is to rotate the designated focus country each year.
The final day of the event involved two site visits. The first visit was to the Sudokwon 50 MW Land Filled Gas Power Plant PPP Project and the second to the W. Suwon to Uiwang Expressway Road Renewal PPP Project. Both PPP projects had been procured as unsolicited proposals; a commonly used procurement method in Korea.
The Asia PPP Practitioners’ Network Conference is an annual event sponsored each year by the Korea Development Institute, the Asian Development Bank and the World Bank Group which dates back to 2010. This year's event was attended by close to 60 individuals from 12 countries and involved several international organisations, as well as a handful of private sector investor representatives.
PPP Risk Allocation Tool
