“Good risk allocation is critical to attracting the
private sector to these projects,” he says. “Once the
;rst deal closes, the next ones are easier.” For projects with a murkier ROI, such as rail infrastructure
initiatives, governments may need to ;nd additional
sources of revenue to attract private partners. O;ering perks like real estate rights along rail lines or
commercial space at rail stations can help sweeten
the pot, Mr. Jett says.
“;at can change the ;nancial picture consider-
ably. ;e government gets a connected country and
it doesn’t have to spend as much money to incentiv-
ize private investors.”
Beyond o;ering incentives, governments must
build con;dence that projects will deliver their
projected value, says Mohammad Abu Rashed, PPP
advisor, PPP o;ce, prime minister’s o;ce, Dhaka,
“Selecting a pipeline of projects that have a clear
payo; is one of the biggest challenges with promoting a sustainable PPP environment,” he says.
Private-sector partners are also hesitant to invest
in infrastructure in countries with a short PPP
project résumé. They worry governments won’t
hold team members accountable for implementing new rules and that PPP laws are stronger on
paper than in practice.
The Philippines has worked to change that
perception. Since launching its PPP program in
2010, the national government has awarded 10
PPP projects collectively worth PHP189 billion.
The program aims to overhaul the country’s
transportation infrastructure and includes road,
airport and building projects.
To take these projects from conception to reality,
the government created the PPP Center, which acts
as the central coordinating and monitoring agency
“Selecting a pipeline of
projects that have a clear
payoff is one of the biggest
challenges with promoting a
sustainable PPP environment.”
—Mohammad Abu Rashed, PPP office, prime minister’s
office, Dhaka, Bangladesh
A rendering of a proposed new
international airport in Manila,