Public, private alliance key to handle crises: Experts

ANKARA

The public-private partnership (PPP) can play a greater role in accelerating the realization of low carbon and climate-resilient infrastructure, experts argued in an online summit on Monday.

Addressing the 5th summit of Istanbul PPP Week, Thomas Barret, the Infrastructure Forum chairman of the Organisation for Economic Co-operation and Development, said that resilience is seen to be a fundamental characteristic of what public and private sectors are now investing in.

He asserted that the current social and economic situation across the globe requires governments and policymakers to deploy all policy instruments and their resources, including PPPs, more than ever.

"All G2O countries should substantially focus on challenges facing humanity which can be whether in the form of a pandemic, … or climate warming," he said.

But he added that this should be done by addressing the challenges and uncertainties facing the public and private sectors.

"Climate change is one of the biggest challenges we have to discuss seriously," he argued, pointing out that the implementation of SDGs (Sustainable Development Goals) and climate change goals are significantly behind the target.

To achieve these goals, he said, more effective and strategic government approaches towards sustainable low carbon and inclusive infrastructure are needed.

However, in recent years there has been a significant switch of investment from greenfield to the brownfield, Barret said.

"An infrastructure can be developed as an asset class. We need to look at the development of the private sector and its willingness to take an increased risk in compensation for an increased reward."

He said especially financial intermediaries such as central banks and the multilateral development banks can no longer have a just simple role in the financial market, rather they need to help the private sector to understand what PPPs are about and what kind of partnerships can be formed towards a greener economy.

'Implementing PPP not easy amid uncertainties'

Also commenting on the issue, David Baxter, senior vice president at the International Sustainable Resilience Center (ISRC), underscored that implementing PPP is not easy under abnormal circumstances.

"However, the public and private sectors need each other even more than in the past," he said.

According to him, a new paradigm is evolving which focuses on not just value for money, but also introduces the idea of value for people.

"This type of approach is critically important since the pandemic has revealed the idea that we really need to focus on risk management projects and the implications of force majeure clauses in contracts."

What is PPP?

Public-private partnership involves collaboration between a government agency and a private sector company that can be used to finance, build and operate projects -- such as public transportation networks, parks and convention centers.

Financing a project through a public-private partnership can allow a project to be completed earlier or make it a possibility in the first place.