Financing and Private Sector Participation

There is massive demand for investment in the transport sector in terms of infrastructure and services as well as maintenance. Most countries are however constrained by limited budgets and borrowing capacity. Optimising the use of resources available and seeking alternative financing mechanisms are critical in this context for developing, operating and maintaining transport infrastructure.

Building on the success of some countries in establishing innovative mechanisms for finance and investment, such as Public-Private Partnerships (PPPs), ESCAP supports governments in implementing measures to efficiently involve the private sector in infrastructure development (for example, by offering training materials for internal capacity building or by providing a diagnostic tool for assessing countries PPP readiness). ESCAP also maintains contact with a network of PPP programmes, units and experts across the region for knowledge and experience sharing. These activities are particularly relevant as financing infrastructure through the private sector remains a complex process, which can have significant financial consequences in the long run.

ESCAP also promotes cost-efficient maintenance policies as a way to preserve the value of existing assets and reduce future financial requirements. It is indeed recognized that every dollar spent on preventive maintenance of road assets saves three to four dollars in future road repairs. Despite this, many governments fail to put in place effective funding support and monitoring mechanisms to maintain their road assets. ESCAP is studying the issue of maintenance with the view to sharing best practices from the region and beyond.

ESCAP assists countries in identifying resources for developing regional transport networks. Although these regional infrastructures have the potential to foster economic integration and generate additional growth, they might receive lower priority than national projects as the latter have typically shorter gestation time and risk profile. To address this issue, ESCAP promotes collaboration with and among international finance institutions and conducts priority investment needs studies.