How to Break Out of PPP Paralysis

I had the privilege of serving as a panel member today at WEF East Asia on the topic of “Pumping Asia's Infrastructure Pipeline.”

The session explored two potential sources to get the region out of its current infrastructure quagmire: the newly created Asian Infrastructure Investment Bank (AIIB) and enhancements to public-private partnerships (PPPs). This in an environment where sustainability concerns and activist protests hamper governments seeking to advance their infrastructure.

Moderated skillfully by Dessy Anwar of Indonesia's Metro TV, the panel benefited from the wide-ranging backgrounds of its participants—including Thailand's always-provocative Minister of Energy Narongchai Akrasanee and impressive senior executives from Dow Chemical, Hitachi, Amec Foster Wheeler, and Indika Energy in Indonesia.

Several salient points emerged from the discussion:

• The AIIB and the growth of Chinese influence will be a positive factor for the region, especially if China honors its promises to follow international norms of engagement.
• Although local and global NGOs are a necessary counterbalance to an excessive focus on profit and development, NGOs should resist the instinct to block projects and try instead to influence them early on and provide positive examples of successful engagement (e.g., in environmental impact analysis).
• ASEAN governments, rather than wishing they had the free reign over projects enjoyed by governments in China and the Middle East, should concentrate on finding ways to engage stakeholders and to anticipate and mitigate sources of delay.
• All will benefit from seizing the region's advantage of strong and willing sources of private sector funding to invest through well-formed PPP schemes.

I added that we must move from what Indonesian Coordinating Minister for Economics Sofyan Djalil cleverly jokes is a PPP norm that stands for “Plan, Prepare, Postpone” to a systematic effort to enhance the three Ps that will contribute most to success: Political Will at all levels of government, Process Thoroughness in program management and planning, and Procurement Excellence in shaping tenders that lead to both strong governance and total life cycle analysis.

Well-attended by both fellow business leaders and the media, the panel was a successful joint effort by the speakers and the organizing team. “This is why I like coming to the WEF,” said one audience member — a government official — to me at lunch afterwards. “It clarified the issues and gave me a sense of where we need to focus.”