Singapore embraces private sector in infrastructure push

Singapore embraces private sector in infrastructure push

Passers-by hold their mobile phones as people take a selfie photo using a smartphone, with Singapore's central business district skyline, in Singapore, May 10, 2019. (Reuters file photo)
Passers-by hold their mobile phones as people take a selfie photo using a smartphone, with Singapore's central business district skyline, in Singapore, May 10, 2019. (Reuters file photo)

SINGAPORE: Singapore has been moving forward on its aim to be the lead broker of infrastructure projects in Southeast Asia, and is intent on getting the private sector more involved.

Globally, government funding accounts for about 40% of infrastructure spending, but in Asia it’s 90% -- an “unsustainable” proportion, Indranee Rajah, minister in Prime Minister Lee Hsien Loong’s office, said Aug 16 at a regional summit hosted by the Singapore Business Federation.

Seth Tan, executive director of Infrastructure Asia, a year-old Singapore governmental agency, said his outfit can help boost the private-sector portion. The agency is tasked with mobilising capital and helping connect supply and demand to get infrastructure projects off the ground.

“Even in trying times for the global economy, infrastructure is still needed,” Tan said in an interview.

Emerging Asia needs about $26 trillion worth of infrastructure investment through 2030, the Asian Development Bank estimates. With multilateral lenders’ contributions generally capped for any single project, there’s plenty of room for the private sector to step forward.

To convince bankers to finance a project, however, “you have to do real, professional feasibility studies,” Mun Leong Liew, chairman of the Changi Airport Group and of Surbana Jurong Group, said at another infrastructure conference Aug 15. You have to “give them confidence that enough study has been done that it’s going to be successful, there’s enough demand, there’s project management.”

That’s where Infrastructure Asia can help. The agency offers finance and engineering expertise for projects across seven markets: Indonesia, Vietnam, Philippines, Myanmar, Cambodia, Bangladesh and India.

Furthest along is a power-generation project in Myanmar, the first phase of a planned 90-square-kilometre urban area called “New Yangon” west of the country’s largest city. Infrastructure Asia is working with New Yangon Development Co, or NYDC, a regional entity that doesn’t receive central government funding.

Infrastructure Asia sought input from power generators, financiers and investors to set standards for the project and “bring it to more firm footing,” Tan said.

NYDC will soon announce its partners on the project, and Singaporean entities stand ready to assist with consultancy, legal expertise and engineering, Tan said.

Gerry Mattios, executive vice president at consultancy firm Bain & Co, said Singapore is an ideal partner for such projects, with the technical expertise to build high-quality infrastructure and global relationships that can help integrate the region’s economies.

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