The government has an important stake in infrastructure development. Considering its public good in nature, strategic importance, profound effects on other sectors, and related issues in public safety and security, and utilization of natural resources, governments always take interest in infrastructure development, whether implemented by the public sector or the private sector. There are also other reasons for government’s interest which include:
• The network nature of most infrastructures implies that they cannot be considered as isolated projects (road, energy transmission line, telephone line, etc.)
• Can be used as a policy tool for development
• Infrastructure is important and needed but individual projects are not always commercially viable (water supply, rural/local roads, for example)
• Bulky nature and large size of investment requirements
• Long to very long existence with perpetual liability through generations (external costs, for example).
However, in this chapter, discussion on government involvement has been made specifically in the context of PPPs and not in relation to many of the reasons mentioned above.