‘How and when to use private money in infrastructure projects’ in the Economist

For their latest article on infrastructure, covering the opportunities and barriers to bringing private capital into public projects in the US, the Economist spoke to GIIA Member Kyle Mangini of IFM and CEO Andy Rose for their insight.  Kyle is quoted on the challenges arising from the disconnect between project and political cycles and Andy on the importance of clear objectives for engaging the private sector.  The article references global best practice from Australia, the UK and Canada, including the role Government can play in increasing public sector procurement and project management capability and the positive impact asset recycling has had on changing public opinion about private ownership of public assets in Australia.

How and when to use private money in infrastructure projects

GIIA highlights 12 months of progress during packed week in Berlin

GIIA reported significant progress on its global infrastructure agenda in March as its Members gathered in Berlin for the Association’s AGM.

The AGM was the culmination of a big week for GIIA which included a high profile presence at the infrastructure sector’s major conference; the launch of a first of a kind report on the impacts of private investment in infrastructure; and a packed evening reception for Members and Guests.

In his report to the GIIA Board, CEO Andy Rose highlighted progress made in his first 12 months including:

  • Growing membership of GIIA from both investors and professional services companies
  • Producing our first major evidence-based report, in conjunction with PWC, entitled Global Infrastructure Investment: The role of private capital in the delivery of essential assets and services 
  • Creating a database, with the support of EY, of GIIA member assets and the impact of these investments around the world
  • Establishing a global tax working group
  • Forming regional networks in North America, Europe and Australasia
  • Engagement with the UK, US and Canadian Governments
  • Participation in OECD/ World Economic Forum Events
  • High profile articles in the UK, Canada and Brussels
  • Over 20 speaking engagements

GIIA launches first of a kind report into private investment in infrastructure

Private investors, including pension funds, sovereign wealth funds and specialist investors are playing a key role in delivering improvements in world infrastructure, according to a new report by GIIA and PwC.

Global Infrastructure Investment: The role of private capital in the delivery of essential assets and services is the first evidence-based account of the contribution of private capital to major infrastructure.  It explores the increasing role of the private sector in investing in infrastructure and delivering essential public services.

The analysis of case studies shows that private investment in infrastructure has produced improvements for consumers, driven by a need to compete (in particular for non-monopolistic infrastructure such as seaports and airports), shifting strategy towards customers; and a desire to meet ever greater efficiency targets set by regulators.

Andy Rose, CEO, Global Infrastructure Investment Association commented:

“This report makes an important contribution to the debate about the role of private finance in delivering the world class infrastructure that is so clearly needed in both developed and developing markets.

“By presenting the evidence base through case studies, the positive role private capital can play is clearly shown. GIIA members are demonstrating that they can improve the performance and efficiency of the infrastructure they own and operate whilst responding to the challenges set by regulators on behalf of consumers.

“With Governments around the world facing constraints on spending, efficient private capital is pivotal in closing the infrastructure gap”.

The report warns that whilst the overall picture is a positive one, the infrastructure industry will need to continue to develop and modernise – with particular focus on managing asset performance, being more transparent in ownership and governance structures, and developing greater ability to invest in new infrastructure, through “greenfield” allocations and new investment structures.

Colin Smith, partner at PwC commented:

“With infrastructure a relatively new market, having emerging over the last two decades, there was minimal evaluation on the impact of specialist investors on the world’s infrastructure.  We believe this is the first global study of its kind.

“It is clear through the analysis that private investment has had a profound and positive impact on the developed world’s infrastructure, and is beginning to take hold in the developing world. We have seen consistent themes with performance higher through good management and continuing investment.

“It is important that investors continue to demonstrate strong asset management skills so that the industry is well positioned to drive the next wave of development and improvement.”

 The full report can be found here.