Status of 3ps through the lens of infrastructure projects in Latin Aamerica
| Autor | Joaquín R. Figueroa Gallardo |
| Cargo del Autor | University of Dundee |
| Páginas | 289-322 |
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status of 3ps through the lens of
infrastructure projects in latin america
By dr. JoaquíN r. FIgueroa gallardo
aBBreVIatIoNS
3P- Public Private Partnership
3Ps- Public Private Partnerships
eIa- Energy Information Administration
eIu- Economic Intelligence Unit
gdp- Gross Domestic Product
Iea- International Energy Agency
Ngo- Non Governmental Organization
uSp- Unsolicited Proposal
aBStract
By 2040 the world’s population is expected to increase
from 7.4 billion today to 9 billion people, with an economy
growing at an average rate of 3.4% per year. This will require
huge amounts of investment in order to satisfy the energy
demand to accommodate the needs and satisfy the living
standards of the population. According to the Iea, expecta-
tions are that by 2040 electricity will represent half of the
total energy supply investment. An expansion in trade and
investment will be required to face the challenges of mee-
ting this energy demand. Despite sizeable efforts to invest
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in transportation, power, water, and telecoms to satisfy
the needs of a growing population, these efforts alone will
not be sufficient. The world currently invests $2.5 trillion
in these areas although the average investment required
is $3.3 trillion a year. Public Private Partnerships present
are alternative route to satisfy these needs, however, 3Ps
currently account for only 5 - 10% of total investment. At
the same time, there are doubts as to their efficiency and
their cost of development. This paper looks at the rational
to develop 3Ps, its meaning, performance, issues and suc-
cess factors, and the progress made in this sector in Latin
America. Governments have limited resources to invest,
allocation is complex, and there are too many needs to be
satisfied. Governments, therefore, need to allocate resources
in the most efficient way possible. They need a very strong
decision-making process to select the best project develop-
ment alternative and thus more robust frameworks are nee-
ded. 3Ps are one of a variety of modes of strategic alliances
and as they can be interpreted differently it is important
that all stakeholders share the same understanding of both
the expectations and the performance of the alliance. The
performance assessment of 3Ps is difficult to measure as it
has the same issues as any strategic alliance. Some effort has
been made to increase analyses that can shed light on the
advantages of 3Ps. Among emerging regions, 3Ps in Latin
America are above average; they perform well in the develo-
pment of regulations, institutions, and financing. However,
there is more work to be done to enhance investment and
the business climate in general and as more 3P experience is
accumulated, a generalized perception of expectations will
emerge, Unsolicited proposals could drive more innovative
and efficient projects, however, there are some areas which
could improve, such as transparency and encouraging com-
petition in order to increase reliability. As in any strategic
alliance, the relationship among parties in 3Ps is complex.
The only way to contribute in filling the investment gap and
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bringing better conditions to the population is by aligning
visions and interests and creating win-win collaborative
environments. This will develop efficient projects that
can provide benefits to all stakeholders, as no one can do
everything alone, collaboration is needed.
INtroductIoN
By 2040 the world’s population is expected to increase
from 7.4 billion today to 9 billion people, with an economy
growing at an average rate of 3.4% per year. This will require
huge amounts of investment in order to satisfy the energy
demand to accommodate the needs and satisfy the living
standards of the population.
According to the Iea, expectations are that by 2040,
electricity will represent half of the total energy supply
investment from the $60 trillion in cumulative investment
and two-thirds from the $69 trillion investment under new
policies and sustainable scenarios respectively.
An expansion in trade and investment will be required in
order to face the challenges of meeting the energy demand
and providing a satisfactory living standard for the growing
population. These needs must be met in a safe, reliable and
affordable way, minimizing environmental impacts at the
same time. This cannot be achieved without innovation,
technology and cooperation among stakeholders (1; 2),
therefore alliances will be needed.
The sizeable global effort being made to invest in trans-
portation, power, water, and telecom to meet the needs of
a growing population is not enough. Currently the world
invests $2.5 trillion in these areas, emerging economies
account for 60% of the investment, and Latin America and
Africa represent 7% and 2% respectively. The required
world investment should be on average $3.3 trillion a year,
therefore, an infrastructure gap of $0.8 trillion a year exists.
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