This book has three parts. The first discusses how economic benefits can be derived from using PPPs to develop, build, and upgrade public infrastructure, but how these partnerships come with considerable risks and challenges. The second part examines the financing mechanisms that can be used to attract so far hard-to-budge private investment in public infrastructure. The third part examines procurement modalities for PPPs in the Republic of Korea, and how better regulation can improve the performance of PPPs in developing Asia. It also looks at the development of infrastructure in Southeast Asia using PPPs, and has a three-country comparative analysis on PPP systems.
Part I has two chapters. In Chapter 2, The Empirical Evidence and Channels for Effective Public-Private Partnerships, Minsoo Lee, Raymond Gaspar, Emmanuel Alano, and Xuehui Han examine the potential macroeconomic benefits from building infrastructure using PPPs. The authors present a framework for identifying the channels through which these partnerships can deliver macroeconomic benefits, particularly in helping reduce poverty by improving the access of the poor to infrastructure. In Chapter 3, Assessing Risk in Public-Private Partnerships, Minsoo Lee, Pilipinas F. Quising, Mai Lin Villaruel, and Xuehui Han estimate the hazard rates of PPPs in developing Asia by analyzing the project-related factors of government support, institutional factors, and macroeconomic conditions.
Part II has four chapters. In Chapter 4, Factors Influencing Bank Project Financing of Infrastructure Public-Private Partnership Projects in Developing Asia, Vivek Rao looks at ways to increase private financing for infrastructure in an analysis of the role of bank lending to PPP projects through project finance. Unlocking this finance will require reducing macroeconomic risks and having well-capitalized banks. In Chapter 5, Syndicated Loans in Project Finance: Empirical Evidence from Asian Public-Private Partnership Markets, Michael Timbang and Vivek Rao assess the potential for bank loan syndication to finance infrastructure PPPs. They examine the channels by which the degree of bank debt concentration and the likelihood of syndicated lending are driven by different factors, but particularly the governance functions played by banks on loan syndicate transactions.
In Chapter 6, Determinants of Public-Private Partnerships in Infrastructure in Emerging Economies, Suk Hyun, Donghyun Park, and Shu Tian examine the role that greater access to finance, especially bonds, can play in promoting infrastructure PPPs. The authors identify the main obstacles to attracting more private capital, and discuss the economic and financial market conditions needed to attract more of these investments. In Chapter 7, Risk Mitigation and Sovereign Guarantees for Public-Private Partnerships in Developing Economies, Alexander Jett analyzes country and sovereign risks in infrastructure PPP financing, and the complementary roles of governments and MDBs in mitigating these risks. Case studies and a shadow bid financial model for a sample project are used to show the potential financial benefits from risk-mitigation mechanisms.
Part III has five chapters. In Chapter 8, Delivering Economic Benefits from Public-Private Partnerships: The Experience of the Republic of Korea, Jungwook Kim and Suhyeon Wi draws lessons from the Republic of Korea's considerable experience in PPPs, with over 600 projects carried out since 1998, for other countries in developing Asia trying to increase private participation in infrastructure using these partnerships. In Chapter 9, Public-Private Partnerships versus Traditional Procurement: A Comparison of Financing Modalities in the Republic of Korea, Hojun Lee and Kiwan Kim, compare the bundling effects of traditional procurement and PPPs, since these partnerships are not always more efficient than traditional procurements.
In Chapter 10, Improving the Performance of Public-Private Partnerships in Infrastructure Services in Asia through Better Regulation, Xun Wu examines the role of regulation in improving the performance of PPPs for infrastructure services in light of regulatory developments since the start of the 2000s. The author draws on lessons from water sector PPPs using case studies from the People's Republic of China and the Philippines to show how a strong strong regulatory environment can improve the performance of PPPs in infrastructure services. In Chapter 11, Public-Private Partnership Development in Southeast Asia, Fauziah Zen looks at infrastructure development in the five Southeast Asian countries that are most actively promoting PPPs-Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam. The author examines the factors that influence the performance of PPPs in the region, and the use of these partnerships in social infrastructure and pro-poor development planning. In Chapter 12, Public-Private Partnership Systems in the Republic of Korea, the Philippines, and Indonesia: A Comparative Review, Kang-Soo Kim, Min-Woong Jung, Mee-Soo Park, Yoo-Eun Koh, and Jin-Oh Kim analyze and compare PPP systems in these countries to identify best practices for making this financing modality an effective catalyst for infrastructure development.