This document discusses the role of government in infrastructure development. It notes that there is a $1 trillion proposal in the US to invest in crumbling infrastructure, while some see it as corporate welfare. Global infrastructure investment needs are estimated to be $78 trillion from 2014-2025. Infrastructure includes transportation, utilities, telecoms, public goods like schools and hospitals. The government must take a holistic view of economic, social and environmental needs in infrastructure spending. Identifying gaps and providing solutions requires considering what type of infrastructure is needed, the source of capital, and who the owner and driver will be. Financing infrastructure projects faces challenges around viability, business models, size and economics, ownership and funding sources. Striking the right

1. ROLE OF
GOVERNMENT IN
INFRASTRUCTURE
DEVELOPMENT
LIM HWEE HUA

2. Adequate Social Infrastructure
2

3. FROM IDEA
$1 trillion to invest in
crumbling infrastructure
- President Donald Trump
3
TO REALITY
A scam or corporate
welfare, massive tax
cuts?
- Senator Bernie Sanders

4. 4

5. 5

6. Source: PWC research
by Oxford Economics
$78
trillion
2014
-2025
6

7. 7

8. Housing
Transport
Schools
Hospitals
8

9. FROM IDEA TO REALITY
Identifying Gaps, Providing Solutions
9

10. IDEA ORIGINATION
SOURCE OF
CAPITAL
OWNER
/DRIVER
10

11. WHAT INFRASTRUCTURE
WHAT
INFRASTRUCTURE
Transportation
Roads/Rail
Airport
Seaport
Economy
Industrial Parks
Commercial RE
Logistics
Telecoms
Utilities
Water
Energy
Waste Services
Public Goods
Buses/Trains
Education
Hospitals
Housing
1
1

12. Infrastructure spending
has to be holistic
• Economic, social and environmental needs
Urbanisation and affluence tilt
towards consumer sectors
• Utilities, transportation and communications
Demographics becoming important
• Schools for the Young and
• Healthcare for the Ageing Populations
12

13. OWNER/DRIVER
IDENTITY OF
OWNER/
DRIVER
State Owned,
Private
Operator
Fully Private
Fully State
Owned &
Operated
Joint-Venture
or Hybrid
13

14. PPPs
DISPUTE
RESOLUTION
Scheduling
Payments
Quantity
Quality
14

15. SOURCE OF FUNDING
SOURCE OF
CAPITAL
Capex Only
State Funded
Fully Private
Instruments
Investability
Fully State
Funded
Joint-Venture
or Hybrid with
Multilaterals
15

16. FINANCING
INFRASTRUCTURE
16
Experiences
Key Drivers

17. Challenges Common to all Economies
17

18. Financing or Viability – Key Causes of Failure
Highway
Railway Bridge
Hospital Airport
18

19. VIABILITY TESTS
BUSINESS
MODEL
BUILD VS
OPERATE
SIZE VS
ECONOMICS
19

20. SIZE vs ECONOMICS
RIGHT SIZE
AND SCALE
Policy
Constraints
White
Elephants
Duration/
Phases Project
Feasibility
20

21. BUSINESS MODEL
SUSTAINABLE
ECONOMICS
Market
Readiness
Political
Constraints
Revenue
Model/
Projections
Governance for
(Private)
Investors
21

22. ROLE OF POLITICS
POLICY
CONSISTENCY
NEED FOR
REGULATION
PUBLIC
GOOD
22

23. MARKET-READY
Investable
Projects
Regulatory
Framework
Liquidity
Structure/Type
of Instrument
Pipeline
23

24. IDEA
G
A
P
S
24
REALITY

25. Builders
Thought
Leaders
Government/
State
Financiers
Operators
Public/
Consumers
25
MANY STAKEHOLDERS

26. Striking a
Balance
Trade Offs
Inevitable
Dynamic
Balance
Different
Stakeholders’
Objectives
SOLID GOVERNANCE
26

27. 27
CONCLUSION

28. FROM IDEA TO REALITY
28