Rigid govt policies ‘hindering infrastructure growth’
SINGAPORE — Rigid and uncoordinated government policies have hindered infrastructure development in Asia, a region expected to account for nearly 60 per cent of global infrastructure spending in the next decade, International Enterprise (IE) Singapore chief executive Teo Eng Cheong said.
SINGAPORE — Rigid and uncoordinated government policies have hindered infrastructure development in Asia, a region expected to account for nearly 60 per cent of global infrastructure spending in the next decade, International Enterprise (IE) Singapore chief executive Teo Eng Cheong said.
In order for more infrastructure projects to come to fruition, there needs to be innovation in government policies, financing and technologies, Mr Teo added. This will also help close the gap in Asia, where more than 600 million people still do not have access to electricity and almost 300 million people still lack access to clean drinking water.
“Today, many government policies in too many countries are simply not conducive enough for infrastructure planning and development and operations. Policies are often too focused on the short term; there’s probably too much rigidity in many policies and they’re not coordinated,” Mr Teo said yesterday at the 5th Asia-Singapore Infrastructure Roundtable.
He suggested that government policies be designed with “sufficient flexibility” to cope with the changing circumstances that usually emerge in the long lifecycle of an infrastructure project. These changes include shifts in demand and in technology.
He also called for more cross-sector coordination “to exploit synergies and make infrastructure much more efficient”, citing the need to coordinate construction of roads and housing development as an example.
“In future, hopefully, we can also exploit other synergies. I went to the LNG terminal in Singapore and I see that very low temperature is generated when they regasify LNG … such low temperatures perhaps can be used for cooling purposes. Similarly, a lot of industry activities … generate a lot of heat and this heat can also be used for other purposes,” Mr Teo said.
It is estimated that between 2010 and 2020, US$4.3 trillion (S$6 trillion)of infrastructure investments will be required in China, US$2.1 trillion in India and US$1 trillion in South-east Asia.
Despite the demand, infrastructure remains underfunded, said Mr Teo, but this will continue to be challenging in today’s climate of austerity.
He added that public-private partnership (PPP) is one way to unlock greater private sector funding. Deputy Prime Minister Tharman Shanmugaratnam said on Tuesday that institutional investors have a larger role to play in infrastructure financing and Singapore has embarked on initiatives to “crowd in” this group.
However, World Bank Group managing director Bertrand Badre said “it is a question of years” before infrastructure takes off as a viable asset class for institutional investors.
Besides better government approach and channelling new capital into infrastructure, companies in the sector have to put more effort into research and development as well as innovations, Mr Teo said.
He added that various modelling software can be used at the design and planning stage to better predict costs and make decisions more quickly. This can often lead to fewer changes in later stages of the project. The use of technology has also resulted in more efficient construction methods.
He also said that data analytics can make operations and maintenance of infrastructure more efficient.
“(Big data) allowed for better monitoring and forecast of demand and supply and, therefore, better solutions to match supply and demand, perhaps through dynamic pricing and so on. This data will also allow for earlier detection of defects, to prevent wastage, to prevent downtime so that operations of infrastructure assets can be much more efficient,” Mr Teo said.