Some observations by speakers at the now-concluded 2nd Global Infrastructure Leadership Forum:
On Africa:
"There is lots of money available for African investment but not many competent groups to put together good projects and attractive deals. Having a project make money is a foreign concept for public funding companies."--Presenter representing a proposed power generation project in Ghana.
Creativity brings financial promise:
A hydropower project proposed for Georgia, the country with the largest hydropower resources in Europe, might not get off the ground if the electricity only was used locally. Georgia has low electric rates. The creative solution--sell power to neighboring Turkey, a high-rate country with growing demand. Plus an international transmission line to Turkey is under construction and will be ready in 2012--the same year the hydro plant would be ready if construction begins in 2009.
Money from customers--and the need for good stakeholder relations:
PA Consulting Group's David Keith said more equity for major infrastructure projects must come from developers and others, but ultimately revenues need to come from customers (the projects' beneficiaries) via higher tariffs and demand-side management. He said you need to be able to make profits on these types of projects in order to put money back into operations and maintenance. To make this sort of business case, project leaders must have excellent stakeholder relations.
Not as "sexy" as roads, bridges, trains or dams:
Several speakers on a water/wastewater projects panel reminded the audience that while water projects are not as attention-grabbing as other projects presented at the conference, they are socially necessary. Despite that necessity, the speakers agreed that water projects are not as advanced as other types of projects in their proposal cycles.
A project was presented to improve water service in a rural area of Gabon. The project included rehabilitation of manual village pumps. The goal is to reduce water-born diseases. Another project proposed building irrigation projects in a semi-arid region of Brazil to grow agriculture there and fight poverty. The speaker noted laws recently passed to encourage public-private partnerships. Finally, a representative of the engineering company Acea described a project for the Dominican Republic that will ultimately reduce consumption through metering, higher tariffs and reducing leakage.
An interesting note is that Acea is owned 51 percent by the city of Rome, a part of the world that has millennia of experience with aqueducts.
Mexico believes in infrastructure spending:
Dr. Luis Téllez Kuenzler, Mexico's secretary of transportation and communication, spoke at lunch. His country believes in infrastructure to counter the effects of the world economic crisis. Mexico will spend 1% of its GDP in 2009 on highways, rail, ports and airports, including its biggest project, a new Mexico City airport. 40% of this funding will come from public-private partnerships. The goal is to double the distance covered by motorways and raise port capacity by 85%, as well as speed up railroads. Dr. Téllez says crisis is an opportunity.
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