Investment in PPPs: Gold Digging in Partially Cleared Minefields Stephen O. Ogunlana School of Civil Engineering Asian Institute of Technology Bangkok, Thailand
The Plot � Introduction � The Gold Rush � Mines, Mines, Mines � Stakeholder Benefits � Opportunities � Dangers � Mining Your Gold Safely
PPPs as part of our living � Privatization is now the way of doing things – Since Margaret Thatcher and Ronald Reagan – Until a new development philosophy is developed
The Gold Rush � “ One morning in January — it was a clear, cold morning; I shall never forget that morning — as I was taking my usual walk along the race after shutting off the water, my eye was caught with the glimpse of something shining in the bottom of the ditch. There was about a foot of water running then. I reached my hand down and picked it up; it made my heart thump, for I was certain it was gold. ” � .....James W. Marshall
The Rush Began
Rush is on
Legacy
Mines, Mines, Mines
Facts and figures about mines � Landmines have been used in both internal and international conflicts around the world. They are cheap and records are often not kept of where they are laid, making them difficult to locate once the fighting has stopped. � As a result, landmines continue to have tragic effects many years after the military conflict has ended. � Landmines continue to kill or maim thousands of victims each year - almost half of them children.
Facts and Figures � Farmers and workers are frequently disabled, losing limbs and consequently their livelihoods � The economic impact of landmines is significant as they can render vast areas of formerly productive land unusable � There are an estimated 60 to 70 million landmines in the ground in at least 70 countries in Africa, Asia, Europe, the Middle East and the Americas
Facts and Figures � Landmines remain active for an average of 50 years � An average of 2000 people are killed or injured by landmines each month � It costs between $3 and $30 to produce a landmine � Whereas the cost of neutralising a landmine is between $300 to $1000 � The average cost for surgical care and prosthetics is $4000 per amputee � 1 out of every 236 people in Cambodia is an amputee as a result of landmine injuries.
The Effect of Mines
Effects 2
Stakeholder Benefits � The Thailand Survey
The Old
Bangkok Transit System (BTS) The new Life Style The new Life Style
A Study on Stakeholder Satisfaction A Study on Stakeholder Satisfaction with the Bangkok Mass Transit System (BTS) with the Bangkok Mass Transit System (BTS) W. Tangkitsiri and S.O. Ogunlana School of Civil Engineering, AIT, Thailand
The summary of the BTS Users and the The summary of the BTS Users and the BTS and TTD Officers’ ’ Satisfaction Satisfaction BTS and TTD Officers BTS and Satisfaction Factors BTS Users TTD Officers Overall Satisfaction on the Service Factors Satisfied Satisfied Overall Satisfaction on the Safety Factors Satisfied Satisfied Overall Satisfaction on Operation Factors Satisfied Satisfied Being able to lift up your life ( Physical and Satisfied Satisfied Psychological Health ) Having a role to solve traffic problem in the satisfied Average city Saving cost of traveling Dissatisfied Average Saving time of traveling Satisfied Satisfied
The Summary of the Non- -Users and the Users and the The Summary of the Non BTS and TTD Officers’ ’ Satisfaction Satisfaction BTS and TTD Officers Motor Car BTS and Motor Factors Shop Van Bus Tri - Taxi Owne Police TTD cycle cycle rs Officers Overall point of Satis - Satis - Satis - Satis - Aver - Aver - Satis - Satis - Satis - view on fied fied fied fied age age fied fied fied BTS skytrain Overall traffic on Dis - roads Aver - Satis - Satis - Aver - Aver - Satis - Satis - Aver - Satisf after age fied fied age age fied fied age - ied having BTS
Rest of the Developing World Opportunities? Africa Asia
Africa? � Lagos, Nigeria � Large Population � Poor Infrastructure � New destination for investment � Japanese report higher profits from Africa (Economist)
Yes, AFRICA � Prime Minister Tony Blair’s Vision � NEPAD Initiative � Good Reports
Southeast Asia � Thailand – Thaksin Phenomenon – Infrastructure Plans – Trillions of Baht? – US$40-60 Bil. in 5 years
The Southern Link
Sectors � Transportation – Roads? – Trains � Energy � Water Supply � Waste Disposal/Waste to Energy � Education
Investment Support Agencies � United States --- Overseas Private Investment Corporation (OPIC) � Japan Export Trade Organization (JETRO) � The Norwegian Guarantee Institute for Export Credits (GIEK) � China – Ministry of Commerce � Italy – Servizi Assicurativi del Commercio Estero (SACE)
Investment Support Agencies (2) � Italy – SIMEST � China Export and Credit Insurance Corporation (Sinosure) � Finland – FINIPRO � UBIFRANCE � India – Export Credit Guarantee Corporation PrivatizationLink
Multi-Lateral Investment Guarantee Agency � A member of the World Bank Group, created in 1988 to promote foreign direct investment into emerging economies � The Agency contributes to development by offering political risk insurance (guarantees) to investors and lenders, and by helping developing countries attract and retain private investment.
MIGA Memberships � MIGA membership, currently 157 countries, is open to all World Bank members. The Multilateral Investment Guarantee Agency has a capital stock of SDR1 billion. In March 1999, MIGA's Council of Governors adopted a resolution for a capital increase of approximately $850 million. The Multilateral Investment Guarantee Agency received another $150 million in operating capital from the World Bank.
MIGA's strengths � MIGA both supports and draws on the extensive resources of the World Bank Group � Acts as an umbrella of deterrence against government actions that could disrupt investments, and allows it to influence the resolution of potential disputes. � Enhances investor confidence that an investment going into an emerging economy will be protected against non-commercial risks.
Latest Works � China: MIGA issued a guarantee of $70 million to Compagnie Générale des Eaux of France for its $245 million equity investment in Shanghai Pudong–Veolia Water Corporation, Ltd. of China � Vietnam: MIGA issued a guarantee of $15 million Crédit Lyonnais, S.A. of France for its swap agreements related to the financing of Phu My 3 BOT Power Company Ltd. (PM3) of Vietnam � Afghanistan: MIGA collaborated with the World Bank in defining and implementing a program of support to the government of Afghanistan
Signposting
The dangers
Dangers � Countries without stable political systems � Countries without legal backing for PPPs � Countries where the economy is not well managed � Countries with archaic laws and regulations
Dangers 2 � Countries with poor transparency records � Governments with unreasonable expectations � Projects that glitter but are without gold
Mining Your Gold Safely � Avoid: Countries that do not make the grade � Be careful: Analyse risks, don’t focus on the positives only � Avail: Use whatever guarantees are available � Beware of mines
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