DELIVERING ECONOMIC INFRASTRUCTURE USING PUBLIC PRIVATE PARTNERSHIPS CAN TRANSPORT SHOW THE WAY?
The OECD estimates that $53tn of investment is required for transport (an annual 2.5 % of global GDP) to meet future demands.Upgrading key infrastructure drives competitiveness, boosts trade and promotes economic growth but new ways of financing are needed. Countries need to consider the relationship between strategic infrastructure planning and long-term infrastructure funds. It is also likely that there will be more privatizations, increasing efficiency and reducing public funding requirements. Pension funds are likely to become more active but need more transparency and regulatory certainty.So what are the challenges facing the development of transportation infrastructure in Azerbaijan, and what role can the private sector play in the design, funding, construction and maintenance of transport infrastructure in the coming years?
Population: 9.2million - GDP: 68.8 US$ billions - GDP per capita: 7,450 US$
WEF 2013 GLOBAL COMPETITIVENESS REPORT THE FOUR BASIC REQUIREMENTPILLARS OF COMPETITIVENESSNote: scale is 1 to 7 with 7 bestAzerbaijanInstitutions = 4.1Infrastructure =4.1Macroeconomics = 6.4Health and Education = 5.1
QUESTION 1 FOR THE PANEL
What are the transport challenges facing Azerbaijan?
WHAT ARE PUBLIC PRIVATE PARTNERSHIPS?
Integration of two or more phases of a project from design and build through to a concession period including maintenance and operationsOutput-based contracts, in which the deliverables are specified in terms of the outputs required, leaving the private sector partner to put forward the best solutions Payment upon delivery, whereby the private firm is paid only for defined assets or services when this feature is combined with output-based specifications the result is a performance-based contractPrivate sector project stewardship, whereby overall control of project execution is transferred to the private sector partner, although the public sector ultimately retains ownership of the asset, including the right to make changes to the requirements or even to terminate the P3 agreementPrivate financing, in which a substantial share of the project is financed through project-specific equity and debt
Source: The Conference Board of Canada
QUESTION2 FOR THE PANEL
What are the opportunities for greater private sector involvement in the delivery of transport infrastructure and services in Azerbaijan?
Source, EC Harris 2013
QUESTION 3 FOR THE PANEL
What are the greatest challenges to delivering greater private sector involvement in Transport in Azerbaijan?