Archive 2009
According KPMG and EIU survey the infrastructure challenge wasn't already a big enough task for many national governments around the world.

Bearing in mind the key role that private sector infrastructure providers will likely have to play in delivering the infrastructure improvements demanded by society, the survey - undertaken by KPMG International in cooperation with the Economist Intelligence Unit - suggests that some governments may have something of a battle on their hands to get the private sector providers fully behind them.

According to the survey, entitled "The Changing Face of Infrastructure", infrastructure providers have concerns over government effectiveness, the politicization of the infrastructure debate, bureaucracy, transparency and even the lack of a sense of urgency.

All of these are seen as factors which could inhibit the providers' own ability to contribute towards tackling the infrastructure challenge - or which may impede further investment being made in infrastructure.

Topping the list of concerns, 69 percent of respondents stated they are concerned that government effectiveness would inhibit their own ability to deliver new infrastructure assets that would support the growth of their national economies. Such is the strength of the scepticism around government effectiveness that economic conditions (63 percent) was only ranked second.

When asked about the greatest public sector impediments to increased infrastructure investment, 42 percent said it was the politicization of infrastructure projects. This was followed by frequent changes in public policy, lack of appropriate public policy and a lack of urgency (all at 28 percent).

Robert Vartevanian, Partner, Head of Infrastructure, KPMG in Russia and the CIS says: "According to a KPMG survey, two thirds of covered top managers of companies operating in Russia find the condition of infrastructure inadequate. This once again shows that despite the crisis the funding of infrastructure projects should remain a national priority. Significant cuts of capital expenditure rates in this sector, including those due the reduction of budget funding allocated for those purposes today, may slow down economic development by many years. It's another matter that many federal and regional investment projects should be revised in order to be more realistic, including their feasibility based on the principles of public-private partnership. This may entail reducing the scope of projects, redistributing project risks, enhancing government guarantees, etc. In this case, we believe, Russian infrastructure projects may still be of great interest to investors, including foreign ones (regardless of crisis phenomena in the world economy)."

As well as outlining the respondents' key concerns, the KPMG survey does also provide something of a wish-list in terms of what private sector providers believe might produce the greatest improvements in governmental effectiveness. Top of that list - supported by 45 percent of respondents - is the wish to depoliticize the infrastructure process.

Transparency also features heavily with providers keen to see greater transparency around infrastructure planning and project selection (44 percent). Forty percent of respondents also advocated greater use of public-private partnerships; an encouraging response which suggests that - despite all the perceived problems - the appetite to partner with governments still remains.

Respondents also voice a number of options which they believe would help to ease the obvious financing issues which continue to hamper infrastructure development in the current economy. Direct government contributions or co-lending is the most popular choice (37 percent), followed by more favorable risk allocations (36 percent) - i.e. where the public sector takes a greater share of the risk - and government loan guarantees (35 percent).

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