January 31, 2011
This fiscal year, the Japan International Cooperation Agency (JICA) began the Preparatory Survey for PPP Infrastructure, a scheme for formulating project plans based on proposals from the private sector relating to public-private partnership (PPP) infrastructure projects to be cooperatively implemented by the public sector and the private sector. Two public calls for proposals were made, and of the responses received, nine proposals were selected from the first round and two from the second, for a total of 11 proposals. (Refer to the appendix: List of Selected Projects.) In the first round, 17 submissions were received from 55 organizations, and 12 were received in the second round from 31 organizations. The proposals received spanned a wide range of fields, including transportation, power, water supply, sewerage systems and environment, with the majority of the proposals focused on Asia. The proposals were evaluated and selected based on need, the likelihood of achievement, the division of responsibilities between the public and private sectors, the likelihood of a Japanese ODA finance , effects on development, and other factors.
Within this scheme, project proposals are solicited from private organizations planning to invest in the private portion of PPP infrastructure projects under the premise of using ODA assistance. JICA entrusts the study to the organization making the proposal and bears up to 150 million yen for the study expenses. The objective of these studies is to formulate a plan toward project formation, targeting PPP projects by the public and private sectors.
It is said that between 2010 and 2020 in Asia alone, domestic infrastructure will require 8 trillion dollars and regional infrastructure will require 290 billion dollars, an immense need. The public sector cannot meet this need alone, and cooperative infrastructure projects by the public and private sectors are rapidly expanding, with an aim at bringing the energy of the private sector to some of the infrastructure projects in construction, administration, maintenance and management, further enhancing the effects and efficiency of the projects. To formulate an appropriate share of responsibility between the public and the private sectors in PPP infrastructure projects, it is critical that the two come together at the initial stages of project formation.
For public infrastructure projects implemented by developing countries, JICA has conventionally provided much cooperation for policy and organization improvement, human resource training such as capacity building in administration, maintenance and management, and financing for actual infrastructure development. In these recent PPP infrastructure projects as well, private companies and other organizations have high expectations about putting to use the knowledge and experience that JICA has accumulated.
This study scheme is attracting attention as a concrete advancement measure for "package infrastructure" project development overseas using the strengths of the Japanese private sector, an essential part of the "New Growth Strategy" laid out by the Japanese government.
Going forward, JICA will advance the architecture of PPP as win-win-win relationships for developing countries, the private sector and ODA while using private sector funding and dynamism to assist with economic growth in developing countries, aiming to provide more effective, more efficient aid.