PUBLIC PRIVATE PARTNERSHIPS IN ASIA: ENABLING FRAMEWORK AND RISK PROFILE

Martinus Abednego, Amber Y.C. Jan and Boeing Singh

ERES from European Real Estate Society (ERES)

Abstract: The economic growth experienced by the Asian countries has triggered the need for creation and rehabilitation of infrastructure in order to sustain the economic growth and remain competitive. The competition for the government budgetary resources between the socially-justified projects and the physical infrastructure expenditures have prompted governments to invite private investors to partially fulfill the widening demand-supply gap for infrastructure while the governments are endeavoring to meet the social commitments with the fiscal constraints. Governments are realigning their traditional budgetary-based procurement strategy to private investment through Public Private Partnership (PPP) approach. Structural & legal reforms and policy initiatives have been introduced by the Asian countries to enable private sector participation in various sectors, including infrastructure and real estate. The private investorsí responses to development of projects through PPP route are greatly influenced by the risk profiles of the projects and the in-built risk management framework besides other country and project specific characteristics. This paper will discuss the comparative analysis of the four Asian countriesí, viz. Taiwan, Thailand, Indonesia, and India experiences with Public Private Partnerships in the delivery of infrastructure. The private sector participation enabling environment and the threats deterring private investment in the traditional publicly procured infrastructure are analyzed using a research framework that reviews each countryís legal framework, government initiatives, economic and structural reforms, and risk profile. The implications of the private investment enhancing measures in overcoming the bottlenecks to private sector participation in the development of infrastructure projects are critically studied with the help of case studies from specific sectors in all the four Asian countries. The paper concludes with the effectiveness of the reforms undertaken in attracting private investment through PPP in the four countries.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2006-01-01
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