18.1 Introduction
In Alvin Toffler’s Second Wave (Toffler 1980), as people left the farms for the city,
the government’s responsibilities had to include the development of waste disposal
facilities and potable water distribution systems. New methods of taxation had to be
formulated to provide the revenue that these government-sponsored projects
required.
During the last two centuries, infrastructure development has been funded by
local and central governments. However, the traditional role of government as the
sole provider of railroads, bridges, tunnels, telecommunications networks, and
power generation and transmission facilities is being debated.
Private developers have the possibility of accessing huge sums of money for
investment and in many cases, they have better management skills (or at least have
fewer constraints) than government workers do, so they are beginning to challenge
government’s traditional role. And, faced with severe budgetary restraints, governments are starting to encourage private investors to participate in a number of
infrastructure projects. They are enacting legislation to create new public/private
partnerships in these fields, applying the Build-Operate-Transfer concept or one of
its derivatives.
In Mauritius, the Concession Projects Bill (No XII of 1997 – 20 June 1997)
passed through Parliament easily, but is still waiting for projects to be implemented
using the facilities it proposes.
The Build-Operate-Transfer trend, begun in earnest in the 1970s and 1980s,
gained momentum in the 1990s.
18.2 Traditional Project Financing
In recent years, the project financing cycle included the securing of loans or grants by
developing countries from funding agencies.
Sources of financing were usually relatively easily available from the Public
Sector sources like Bilateral Aids, Development Banks such as the World Bank,
African Development Bank, and Export Credit Financing Corporations i.e. credit
from foreign suppliers.
This type of financing usually accrued to the developing countries central Governments, through Loan Agreements, in terms of soft loan lending (i.e. low interest
rate and long maturities) and hard-loan lending (i.e. higher interest rates and shorter
maturities).
However, these traditional sources of finance have tended to become more and
more scarce on the world market, for the following reasons:
(a) increased demand for additional infrastructure resulting from population growth
and economic growth,
500
18 Infrastructure Markets and the Private Sector
In Alvin Toffler’s Second Wave (Toffler 1980), as people left the farms for the city,
the government’s responsibilities had to include the development of waste disposal
facilities and potable water distribution systems. New methods of taxation had to be
formulated to provide the revenue that these government-sponsored projects
required.
During the last two centuries, infrastructure development has been funded by
local and central governments. However, the traditional role of government as the
sole provider of railroads, bridges, tunnels, telecommunications networks, and
power generation and transmission facilities is being debated.
Private developers have the possibility of accessing huge sums of money for
investment and in many cases, they have better management skills (or at least have
fewer constraints) than government workers do, so they are beginning to challenge
government’s traditional role. And, faced with severe budgetary restraints, governments are starting to encourage private investors to participate in a number of
infrastructure projects. They are enacting legislation to create new public/private
partnerships in these fields, applying the Build-Operate-Transfer concept or one of
its derivatives.
In Mauritius, the Concession Projects Bill (No XII of 1997 – 20 June 1997)
passed through Parliament easily, but is still waiting for projects to be implemented
using the facilities it proposes.
The Build-Operate-Transfer trend, begun in earnest in the 1970s and 1980s,
gained momentum in the 1990s.
18.2 Traditional Project Financing
In recent years, the project financing cycle included the securing of loans or grants by
developing countries from funding agencies.
Sources of financing were usually relatively easily available from the Public
Sector sources like Bilateral Aids, Development Banks such as the World Bank,
African Development Bank, and Export Credit Financing Corporations i.e. credit
from foreign suppliers.
This type of financing usually accrued to the developing countries central Governments, through Loan Agreements, in terms of soft loan lending (i.e. low interest
rate and long maturities) and hard-loan lending (i.e. higher interest rates and shorter
maturities).
However, these traditional sources of finance have tended to become more and
more scarce on the world market, for the following reasons:
(a) increased demand for additional infrastructure resulting from population growth
and economic growth,
500
18 Infrastructure Markets and the Private Sector