The Manila Times, 31 May 2012
Out of the selected 16 countries in Asia-Pacific region, the Philippines ranked eighth in terms readiness and capacity to accomplish sustainable, long-term public-private partnerships (PPP) projects, a new study called “2011 Infrascope” commissioned by the Asian Development Bank (ADB) said on Wednesday.
The study revealed that reflecting their robust institutional and regulatory frameworks, the top performing countries in Asia-Pacific in 2011 were Australia (No. 1), United Kingdom (No. 2), South Korea (No.3), Gujarat state in India (No. 4), India (No. 5) and Japan (No. 6).
China, which ranked at seventh, also performed well with 614 PPPs reaching financial closure between 2000 and 2009, despite a relatively underdeveloped institutional and regulatory environment.
“The strong willingness and capacity of provincial governments for carrying out PPP projects, a friendly investment environment, and the sheer scale of the China market for infrastructure drove activity,” ADB said in a statement.
The study also showed that at the lower end of the index were Philippines (No.8), Indonesia (No.9), Thailand (No.10), Bangladesh (No. 11), Pakistan (No. 12), Kazakhstan (No.13), Vietnam (No.14), Mongolia (No.15) and Papua New Guinea (No.16). It added that the lower ranking was from a lack of experience with PPPs and underdeveloped institutions and regulatory frameworks.
However, the study said that the Philippines, together with other emerging economies in Asia-Pacific region like Pakistan, Bangladesh, Kazakhstan, Thailand and Indonesia, are moving swiftly to put in place the needed laws and structures to attract more private investment.
Varied readiness
ADB said that the assessment, carried out on 11 developing economies in Asia-Pacific, along with four benchmark countries, and one state, Gujarat in India, shows an increasingly open environment for PPPs, though with individual countries at different stages of readiness.
“It is the capacity of the public sector to be able to react systematically to the complexities associated with PPP projects that will ensure long term success,” the study noted. Moreover, ADB noted that while overall prospects for PPP development remain bright in Asia-Pacific region, governments need to continue reforms and address capacity gaps for the design and implementation of effective projects.
It added that Asia-Pacific has seen a boom in PPPs in the past decades, however, to advance the process even further, the region needs more effective public sector oversight agencies and in some instances more political will.
“In order to leverage the $8 trillion required over the next decade for physical infrastructure in Asia, public financiers like ADB must undergo a complete change of mindset and shift their focus from sovereign projects to PPPs,” said Woochong Um, deputy director general of ADB’s Regional and Sustainable Development Department.
Um added that studies such as 2011 Infrascope will help ADB’s developing member countries address the areas of PPPs that need to be strengthened. In 2011, the Philippine government bid out only one PPP project—the P1.96-billion Daang Hari-South Luzon Expressway (SLEX) Link Road Project to Ayala Corp.
This year, various projects have been rolled out by the government through the Philippine PPP Center.
Among the major PPP projects were the CALA Expressway (Cavite and Laguna Side); Integrated Transport System; Light Rail Transit (LRT) Line 1 South Extension; LRT Line 2 East Extension; Modernization of Philippine Orthopedic Center; Ninoy Aquino International Airport Project (Phase II); PPP For School Infrastructure Project; Vaccine Self-Sufficiency Project-Phase II; North Luzon Expressway-SLEX Connector Road; and Quirino Highway Improvement and Rehabilitation.
