FACTORS CONTRIBUTING TO LOW PRIVATE INVESTMENT IN INFRASTRUCTURE PROJECTS IN SOUTH EAST ASIA: MOTIVATIONS AND BARRIERS BEHIND PRIVATE INVESTORS' INVOLVEMENT IN PUBLIC PRIVATE PARTNERSHIPS IN THE REGION

Abstract

Recent estimates have shown that the Southeast Asia, excluding Brunei, Laos and Singapore, presents a wide gap between infrastructure demand and supply (ADB, 2017). Highly in need of private investment, governments are looking for ways to lure private investors that are looking beyond their national borders for opportunities. In order to attract them, schemes known as Public Private Partnerships (“PPP”), particularly concession schemes, are being used to lure companies not only to invest money, but also to transfer expertise in infrastructure development in the hope of earning a substantial return. However, there are few takers for such schemes. This dissertation aims to provide a more relevant and in-depth study on the factors influencing private investments in infrastructure in the region and further use it to underpin the foundation of cross-border infrastructure project management in the region. To identify the contributing factors, namely “motivations” and “barrier”, of private involvement in PPP infrastructure projects in SEA, a thorough review of literature and case studies were conducted. It gave rise to the identification of 4 “motivations” and 6 “barriers”. A survey was then conducted to collect quantitative scoring by private investors on their perceived degree of importance of the contributing factors behind their PPP investment decision, specifically, in Singapore, Indonesia and Myanmar. The total number of surveys achieved was 18. Subsequently, sampling tests are used to statistically conclude that the more distinctive the countries are, in terms of social, economic and political structure, the higher the differences in the perceived significance of barriers to private firm’s PPP involvement in the countries. In conclusion, there are significant opportunities for PPP investments in ASEAN and the biggest contributor, in terms of the level of capital, technology and expertise required for Southeast Asia regional infrastructure projects, remains to be the private sector. Therefore, country representatives, together with the private entities should collectively contribute to the evolution of the multilateral frameworks supporting their collaboration. For region to move forward, the main agendas for the governments will still be on the creation of an inclusive and strong political, legal and regulatory environment.