How to close the infrastructure gap with more quality and transparency? The supply and quality of infrastructure, especially in developing countries, is far below what is required to guarantee a good quality of life for its citizens: roads in poor condition, lack of drinking water and low coverage of electricity are some of the common symptoms in developing countries, affecting in most cases the most vulnerable population.
Attracting private investment is a key element in closing the investment gap.
To close the gap there is no magic, we must increase the investment! According to studies, the LAC region needs to increase investment by some USD 150 billion per year or approximately 2.5 percentage points of GDP. Considering the fiscal challenges that the countries of the region face, added to the important but limited investment of the Multilateral Banks, it is clear that private investment, both domestic and foreign, has a key role in this equation.
Improving the quality of the projects is a key element to increase the efficiency of the infrastructure by reducing the need for investment.
Studies by the consulting firm McKinsey indicate that investment needs can be reduced by up to 20 per cent if countries make their selection, planning and project design processes more efficient.
The problems that can be reduced with better projects include: cost overruns in civil works, socio-environmental problems, renegotiation of contracts, in addition to robust planning and design processes implying more transparency in the application of resources.
The SOURCE platform can contribute to achieving better projects and more private participation.
With the mandate given by the G20 to help close the infrastructure gap, the Sustainable Infrastructure Foundation (SIF) and the multilateral banks joined forces and in 2015 launched the SOURCE Platform. This online platform has two objectives:
1. Serve as a roadmap in the preparation of infrastructure projects, offering the public sector a standard, structured, transparent and validated process by the private sector.
2. Establish continuous communication with the private sector and with civil society, from the early stages of project design, whether investors, builders or operators, as the population benefited and / or impacted by the project.
And what does it provide to governments? What are the advantages of this platform?
The information handled in the platform includes the main stages of preparation of an infrastructure project with its different dimensions, including institutional, technical, social, environmental, legal and financial. The project models that are available (for roads, railways, airports, among others) were prepared under an extensive process of consultation and collaboration of the private sector, which enriched the tool thanks to hundreds of comments received.
Although governments throughout the world and in the region, have established mechanisms and processes for planning and publishing their projects, the SOURCE platform can complement these capabilities, since by incorporating knowledge from the private sector, the asymmetry between what the Government thinks that the project must be and what the private is really prepared to deliver.
The platform is already in use in 41 countries and the project models are available in nine languages, including Spanish and Portuguese. The IDB offers training for the use of the platform for the governments of the region. Recently, two trainings were conducted for 50 Brazilian professionals. In addition to Brazil (states of Mato Grosso and Ceará), the IDB has supported pilot projects in Paraguay, Colombia, Peru, among others. The states, provinces and municipalities, for example, have found in the tool a very interesting way to have access to investors and international experts.
The platform is free for all public entities. To have access, you can send an email to the Department of Infrastructure of the IDB, Transportation Division and after a 2-hour online training, you can have your access.
By Reinaldo Fioravanti
Source: IaDB Blogs